The European automotive sector - with the tailwind of the incipient economic recovery and the (earnings) prospects due to the upcoming transformation to emission-free driving - has so far achieved the best price development in the comparison of the 20 (Stoxx) sectors in 2021. Since both selected sector heavyweights and selected stocks from the mid-market sector bear this price trend, the relative strength against important overall market and standard stock indices (e.g. Stoxx 600; Euro Stoxx 50; Dax) is likely to continue in the coming months. For the second half of the year, however, a slower pace should be taken into account.
While Daimler (technically on hold) should wait for the upcoming spin-off from "Daimler Truck & Bus" in autumn, BMW (technical purchase; price target: 105 euros), VW advantages (technical purchase; price target: 260 euros) and Porsche are on offer Automobil Holding Vorzüge (technical purchase: target price: 110 euros) for new positions. The suppliers Michelin (target price 145 euros) and - somewhat more speculative - Continental (target price: 145 euros) are also worth buying. In contrast, the Italian-French Stellantis (overbought location), the Italian Ferrari (relative weakness in the sector) and the French Renault (relative weakness in the sector) are currently technical exchange candidates.
In the European Stoxx Automobiles & Parts, “only” twelve automobile manufacturers and suppliers from the Stoxx 600 are currently combined. This sector index, which, like the Stoxx 600, started with 100 points at the end of December 1991, shows a medium and long-term relative strength compared to the overall market index despite all fluctuations. From a technical point of view, this is reflected in a very long-term bull market - starting from the price low of EUR 83.30 in October 1992. Here (starting at 144.40 euros in March 2009 after the financial crisis) there was an accelerated, technical picture book bull market up to 694.30 euros in March 2015 (previous all-time high). Then came the diesel scandal.
Below the resistance zone of 690 to 695 euros, there has been a sideways pendulum movement in the last six years, which ended in the weakness of the corona bear market (February / March 2020) and a technical sell-off at 255 euros. There the sector index turned upwards and - accompanied by several investment buy signals - established a new bullish trend that brought the index back to the six-year resistance zone. On the one hand, it should come as no surprise to see normal consolidation below this zone. On the other hand, the market breadth, i.e. the isolated technical situation, especially the sector heavyweights, showsthat the sector will rise to new all-time highs in the coming months with another investment buy signal (jump over the resistance zone) and that the fine technical bull market is likely to continue towards 750 euros.