HELLA: Joint venture at Jianxing Zhejiang, 700km away from WuhanSideways movement presents low volume and in the past two years (2018 and 2019), HLE has entered July in a bearish mood. From the upside, the price is at 0.5 fibonacci retracement level although the head formed on June 8 surpassed 0.618 for a bit. From the down side (blue fib retracement), the price is at 0.236 level. A sharp fall beyond 0.382 level in the next 2 weeks would mean a bullish trend reversal.
Causes for this to happen:
Due to covid19 tensions and also US-EU trade war we may see a short-term (6 months) decay predicted by the Head and Shoulders figure finished on June 22. Deutsche Bank sticks neutral on HLE's target price at 30€ although JP Morgan offers buy rating until 41€. In addition, HLE seems not to be scared about a new virus outbreak in China and has established close relationships with Jianxing, in Zhejiang province, shaping a joint venture with Minth to produce radomes and illuminated logos. In Zhejiang (currently +30ºC) there were 1,269 covid cases, 1.52% of the total Chinese Mainland cases. Zhejiang is 1000 km away from epicenter Wuhan. If news about covid19 evolving in China continue to happen, HLE will be seriously damaged by it.
