Deutsche Bank: my look at the charts.

September 30, 2016

Deutsche Bank’s (DB) struggles have been if focus for some time but the stock featured front and centre in many trading commentaries after Thursday’s session. This piqued my interest to consider how the DB charts are shaping up at the moment and, whilst they are certainly bearish, there does seem to be some buying happening here. 

DB monthly: the $20 level had been some horizontal support and was tested back in late 2008 and early 2009. This level held back then but was broken earlier this year; January 2016. There is the look of a falling wedge here though and these are often bullish-reversal patterns. Thus, watch for any wedge trend line breakout that is supported with an increase in the corresponding DMI and ADX momentum. Price is below the monthly Cloud which is bearish.

dbmonthly

dbmonthlycloud

DB weekly: there is a clear pattern of lower LOWs and lower HIGHs and this would need to be broken before traders could be confident of any possible recovery. It is worth noting that both the +DMI and -DMI are above the 20 level for now and so there is a bit of buying happening out there. Price is below the weekly Cloud which is bearish and trading Volumes are increasing.

dbweekly

dbweeklycloud

DB daily: there is a smaller descending wedge in play here on the daily chart showing lower HIGHs and lower LOWs and this pattern would need to be broken before traders could have much faith in any recovery. Like with the weekly chart though, the +DMI and -DMI are both above 20 suggesting some people are buying here. The lower chart shows a spike in trading volume on Thursday but, whilst price traded lower on the day, it closed off its LOW as further proof that someone was buying!

I would not be confident of any recovery here though until I saw the following:

  • the daily chart’s upper wedge trend line broken to the upside.
  • The ADX > 20.
  • The +DMI > 20.
  • The -DMI <20.
  • Price is back above the daily Ichimoku Cloud.

dbdaily

dbdailycloud

Summary: Deutsche Bank has been in decline, essentially, since May 2005. Price bounced up from the $20 level in 2009 but this support was broken earlier this year. Whilst the stock continues to make bearish moves with lower HIGHs and lower LOWs there are some bullish-reversal wedge trend lines in play on the daily and monthly charts as well as the suggestion of some buying in play with the +DMI trading above 20 on the daily and weekly charts, albeit only just.

Thus: Watch the daily, and then monthly, wedge patterns for any trend line breakout that evolves with an increase in the corresponding DMI and ADX momentum.