Stock of the day: Munich Re

It’s Tuesday, and before we get into the details, I have an interesting language exercise for you. The exercise is to correctly pronounce the name of the company we’ll analyse today. It is: Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft. The shorter version is: Münchener Rück and even that version isn’t pronounceable! I guess a more user-friendly option would be: Munich Re. So, let’s stick to that version, shall we?

Munich Re is a leading global provider of reinsurance. It’s listed on the Frankfurt Stock Exchange in Germany. Here, we had a very interesting end of October, and November will most probably also be quite eventful.

As you can see on the chart, the price managed to escape from the long-term symmetric triangle pattern (red). That, in theory, gave us a buy signal. However, on November 1st, the stock met a crucial resistance on 259 EUR (orange). As long as we stay below this resistance we can’t  think of the proper long-term buy signal, especially since the price has created a nasty looking shooting star candle (yellow).

In order to get a proper signal, we need to see the breakout of the orange resistance, a daily candle closing above it. Chances for that are quite significant.