Volkswagen Woes….Which could have been avoided by Investors’

Vorsprung durch Technik roughly interpreted as “Advancement through Technology” is a German language phrase and the main advertising slogan for the German car maker Audi, part of the VW group…..It has been used in Audi advertising campaigns all over the world, except in the United States where the slogan “Truth in Engineering” is used……Priceless!

There has been enough media coverage and market comment in respect of Volkswagen’s shock announcement on its cheating on emissions, so I will not add to it, excepting to repeat a section of our Investment Markets Overview – W/E 25th September, which said, “Aside of the reputational damage to the VW brand, and possibly to other auto Marques, it reflects poorly on Germany’s leading sector, manufacturing, as questions are raised on possible cheating elsewhere, quite ironic after Germany has spent the past few years berating Greece for being tax-cheats.”

Instead, we remind once again, that investors’ didn’t need to suffer the 34% collapse in Volkswagen’s share price last week, nor the bulk of the 60%+ slump since its March all time high. They should study the charts, or find someone who does :

30 Sept 15 .

As set out within the January 2015 post “Oil Price Collapse, Why the Surprise?Our charts gave great clues to the Oil price, before the slump?

Similarly with Volkswagen, our chart model initiates colour- coded signals, which indicate Buy (green), Neutral (white) or Sell (pink) signals, which are supported by other technical observations not shown here.

The two-year weekly data chart shown above, which is priced in £GBP, shows the panel change to Neutral shortly after the peak price of 255p was recorded on the 20th March 2015. That was the first clue to be alert for a trend change, which was confirmed in early July when the pink Sell signal kicked-in at 215p per share, a modest 10-15% hit depending on which signal you chose to sell Volkswagen at. The intervening “death cross,” where the 50-day crossed through the 200-day moving average confirmed a likely acceleration of the share price fall.

For subscribers who have the skills and investment freedom to short the share price, great short-term trading profits were available, but of more importance is the fact that all subscribers could have avoided the recent sharp losses.

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