At €800, it would once again be attractively priced for first-time buyers.
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@Multibagger That's how it looks. There's still a gap to close, and once that's done, it could stabilize.
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I'm seriously considering buying two stocks because I'm still missing an industrial stock anyway. Do you think the price will really drop any further? Investing Pro says it's fairly valued and has 8% upside potential until it reaches a fair valuation.
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@HappyJulienDay For now, I'd wait for the stock to at least find a short-term bottom. It's plummeting right now, so I wouldn't jump in right in the middle of it.
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•@HappyJulienDay It's difficult—we don't yet know the consequences of the alleged loss of the major naval contract. In the worst-case scenario, Rheinmetall could end up with a shipyard without any orders. That could prove costly. Before the defense industry boom, shipyards in Germany weren't in high demand.
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•@HappyJulienDay So, from a purely technical perspective, the correction following the formation of the top is still underway. Of course, this could also have been the bottom—for example, the low from April 25. To me, there’s more evidence suggesting it will drop another notch toward €800: 1. today’s sharp sell-off, 2. an upward gap just above €800, 3. the 200-week moving average runs through the ~€800 level, and 4. there’s also higher volume at that level. I haven’t analyzed the stock from a fundamental perspective.
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•@jkb92 I still don't understand technical analysis :-) If Rheinmetall ends up getting the naval contract after all, the stock will go up, regardless of any technical analysis limits. Does technical analysis work in the long term, or is it just for trading?
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•@IronEagle That’s a matter of belief. There’s a great podcast from “Wir lieben Aktien” with Adrian explaining why this works. If you’ve taken a look at the past few months on $RHM, you can see, in my opinion, that technical analysis works. There’s been a pretty good news flow, and yet the stock has kept falling—hitting new lower lows and lower highs. In my opinion, it also works because so many people stick with it. “Smart money” simply wouldn’t buy near all-time highs; they often buy when others are running away from the stock. That’s how they slowly stabilize the price; then the trend reverses, and only once it’s already gone up quite a bit do retail investors start jumping back in. And if you take a look at technical indicators like the RSI and study them, I simply wouldn’t buy a stock that I intend to hold long-term (i.e., not for short-term gains) if it’s heading toward overbought territory, because when you look at stocks over the long term, they all eventually return to their 200-week moving average—or at least approach it.
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•@IronEagle Sorry, that was really long and a bit all over the place. Here’s the podcast: https://open.spotify.com/episode/0nmEiP8Ipq1uwl1u3wTxO8?si=8q9WRRBVSE-K3sNK36rKlg
There will be plenty of people who’ll always tell you that it’s voodoo, but they don’t have any real arguments or examples to disprove it. You just have to form your own opinion. I’m not trying to convince or convert anyone against their will, but if someone asks me, I’m happy to share my perspective. I used to think it was nonsense, too, and unfortunately I still have a few “dead weight” stocks in my portfolio from that time—stocks I’m fundamentally convinced are good, but I just bought them at the wrong time.
There will be plenty of people who’ll always tell you that it’s voodoo, but they don’t have any real arguments or examples to disprove it. You just have to form your own opinion. I’m not trying to convince or convert anyone against their will, but if someone asks me, I’m happy to share my perspective. I used to think it was nonsense, too, and unfortunately I still have a few “dead weight” stocks in my portfolio from that time—stocks I’m fundamentally convinced are good, but I just bought them at the wrong time.
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•@IronEagle And one last thought on this: if $RHM does end up getting the contract, the stock will definitely go up. The question is, though, whether it will be enough for a new high, or just a rebound before it goes down again. That’s technical analysis. For me, it’s not about always buying at the exact bottom, but rather about identifying areas where I think a reversal is likely.
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•@jkb92 Thank you so much! That really helped me a lot. I’ll still tend to buy and sell based on fundamental data (and, of course, always make the wrong decision :-) ). But maybe I should pay more attention to technical analysis after all.
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