Two opportunities on German stock market: K+S und Lufthansa (27.09.2016)

K+S, a German producer of кalium salt, has reached its historical minimum, falling intraday below €16. .

Figure 1: on 27.09.2016 K+S came very closely to its historical minumum
Figure 1: on 27.09.2016 K+S came very closely to its historical minumum

The cause is allegedly the downgrade by Deutsche Bank (Sell, target €14).
(Well, Deutsche shall rather think about itself, it will likely have to pay up to $14.000.000.000 fine and Frau Merkel says, she is not going to help).

Yes, K+S experiences bad time but fundamentally nothing has happened. Moreover, whether the Deutsche Bank analysts are really impartial is a big question. Additionally, the potassium price is currently quite low; likely it will grow. It is hard to estimate risk/reward ratio quantitatively but I am quite sure it is promising. I recommend to invest up to 2% of your capital in K+S stock (I, myself, have invested 4% update 28.09.2016: the stock grew 2.5%, so I sold and reduced its weight in portfolio to 3%, update 04.10.2016: I sold 1% more with small profit, the remaining 2% will be kept in mid/long term) with planning horizon about a year. Stay with letYourMoneyGrow.com, we will inform you when it is optimal to sell from our point of view.

 

Another opportunity is Lufthansa. It is, however, less distinct, thus we give no recommendations; though I, myself, invested 2.5% of my trading capital in its stock (update 28.09.2016: 1.5%).

on 27.09.2016 Lufthansa dived below €10.00 but still there is some space till the bottom
Figure 2: on 27.09.2016 Lufthansa dived below €10.00 but still there is some space till the bottom

 

R-code to reproduce the charts

library(quantmod)
startDate = '2007-01-02'
endDate = '2016-09-28'
getSymbols("SDF.DE", from=startDate, to=endDate) #K+S
getSymbols("LHA.DE", from=startDate, to=endDate) #Lufthansa
chartSeries(SDF.DE, subset="last 6 years")
chartSeries(LHA.DE, subset="last 6 years")

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