Porsche (PAH3): German Auto Industry under pressure

Looking at Porsche on the monthly chart, we’re analysing its entire price history since becoming a publicly listed company in April 2001. After a massive rally to its peak at €160, the stock experienced a sharp decline back to its IPO levels. Since then, it has traded within a well-defined range between €94 (range high) and €35 (range low), with the mid-range around €65.

Each time the range low was reached, the price subsequently moved back toward the range high, demonstrating the typical characteristics of a range-bound market. Now that Porsche is back at the range low, coupled with the RSI at its second-lowest level ever, we see this as a strong opportunity to gain some exposure to the German automotive market.

Admittedly, the German auto industry is under pressure, with Porsche's deliveries to China down 29% year-over-year. Chinese EVs are currently outpacing German luxury cars in technology, making it difficult for Porsche to regain market share. However, this level represents one of the best opportunities for a swing trade.

If the range low is broken and prices drop to COVID-era levels, Porsche would face significant challenges, requiring major developments to recover. For now, we expect a move back toward the range high over time. While this is a long-term play given the monthly timeframe, it offers a promising swing trade setup.

Key Levels:
Range Low: €35
Mid-Range: €65