A stock you can buy low and sell high

TL;DR

Deutsche Bank has experienced a significant decline in its stock price, but recent chart patterns and momentum divergence suggest potential for substantial rallies in the months and years ahead.

Transcript

hello it's john burford with chart of the week for tuesday the 6th of april the day after the bank holiday and i am covering deutsche bank which is one of the largest global banks it has fallen on extremely hard times i rarely see anything positive um in the press about the bank usually it's quite negative it it has attracted lots of negative headl... Read More

Key Insights

• 😑 Deutsche Bank has faced significant challenges and negative press, contributing to a sharp decline in its stock price.
• 👋 The three-wave pattern and momentum divergence in the chart analysis suggest a potential shift in investor sentiment and a possibility for substantial rallies in the future.
• 🫥 The breakout above a major downtrend line and the saucer bottom pattern further support the potential for upward movement in the stock price.
• 🎯 Targets for potential rallies are estimated, with the first target around 20 euros.
• 🏤 While a pullback from current levels is possible, sustained trading substantially below 7 euros would be a cause for concern.

Questions & Answers

Q: Why has Deutsche Bank's stock price fallen so drastically?

Deutsche Bank has faced negative headlines due to questionable dealings with clients, which has contributed to its declining stock price. Additionally, a buy and hold strategy does not guarantee success for all stocks, as demonstrated by this case.

Q: What is the significance of the three-wave pattern in the chart analysis?

The three-wave pattern, specifically the shallow C wave in comparison to the abrupt A wave, suggests a shifting of ownership from weak hands to strong hands. This can indicate a distribution phase and potentially precede a bullish reversal.

Q: Why is momentum divergence considered significant in this analysis?

Momentum divergence refers to a discrepancy between the price trend and the momentum indicator. In this case, a divergence is observed at the end of a long bearish trend, indicating a potential reversal and shift in investor sentiment.

Q: What is the significance of the saucer bottom pattern mentioned in the analysis?

The saucer bottom pattern, along with the momentum divergence, suggests potential for sharp rallies in the stock price. This pattern is often seen as a bullish signal and indicates a possible trend reversal from a downtrend to an uptrend.

Summary & Key Takeaways

• Deutsche Bank's stock price has fallen dramatically, reaching a low of four euros from its all-time high of 150 euros over 20 years ago.

• The chart analysis highlights a three-wave pattern, with the C wave showing a series of overlapping waves indicating a distribution from weak to strong hands.

• Momentum divergence and a breakout above a major downtrend line suggest potential for sharp rallies in the stock price, with a first target around 20 euros.