With almost one hundred and fifty thousand employees, and operating in no less than seventy countries, Allianz (ETR: ALV) is enjoying a strong bullish trend for its stock price that is now dealing in the €140/share area, up from the €70/share level less than five years ago.
Is the trend still intact? Before answering that question or trying to look for technical reasons, the fundamental side still offers us clues regarding where the share price may head in the short to medium term.
Besides being one of the biggest insurers in the world, Allianz tried to diversify its portfolio by creating one of the biggest and more complex financial vehicles. They are one of the world’s largest asset managers, with third-party assets of almost €1.5billion.
This helps the company unwind challenges in the insurance market, and allows them to adapt to changes in monetary policies all over the world, as well as diversifying its revenue stream and strategies.
As an insurer with such a strong international presence, Allianz was not affected that much by the rise in the dollar index in recent years. As a matter of fact, they benefited from a lower Euro rate that came as a result of ECB (European Central Bank) easing policies; Even now the ECB is running a €60billion quantitative easing program that is supposed to keep the pressure on the Euro rate for quite some time.
That being said, prospects are brighter for Allianz, and now that the Federal Reserve of the United States is preparing to meet for the September FOMC (Federal Open Market Committee) meeting, the impact on Allianz, in particular, should be minimal.
On the technical side, after the double bottom from the €70/share area, markets seem to have started an impulsive move but this impulsive move has a complex correction for the second wave, meaning it ends above the end of the previous impulsive move.
In plain English, I am looking for a fourth wave to end around current levels, and a new, fresh, impulsive move to start to end the bigger degree one – at higher levels.
All in all, I am bullish on Allianz from both a technical and fundamental picture and I am looking for higher values. Call options are recommended from the current 140 area with as big an expiration date as possible to avoid any headwinds from the Fed this week.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
