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Berger: Lufthansa could fly as German economy takes off
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The Steady Trader, Serge Berger believes the recent rise in German stocks will have a positive impact on German airline, Lufthansa’s stock price.
The DAX Index closed at a new record high last Friday, after four consecutive weeks of growth. Later that day, the German government released data that showed the largest increase in GDP in three years. The German economy grew by 0.8 percent, with domestic demand being the largest contributor to demand in the last quarter. The country estimated an annual-growth forecast of 2.2 percent for 2014. German stocks, including Lufthansa, are expected to benefit from this positive economic data on Monday morning.
Contributing to a potential rise for Lufthansa, is the company’s announcement over the weekend that a mediator has been hired to help settle a recent series of pilot strikes. The company has been engaged in wage debates with pilots that have impacted the airline’s daily operations. The presence of a mediator will likely increase investor confidence that a settlement will be achieved in the near-future.
Serge is looking to buy the stock on a close above last Friday’s high near EUR 18.75. His price target is set at EUR 19.80, with a stop of EUR18.20.
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