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Technical Analysis – Deutsche Bank at a crossroads

Technical Analysis – Deutsche Bank at a crossroads

Deutsche Bank is still trying to find its direction after the March correction. It has been range-trading over the past 45 days with a symmetrical triangle forming. This pattern is a combination of lower highs and higher lows, confirming the uncertainty that appears to dominate the market participants’ thoughts.

This structure does not give a strong indication of the direction of the imminent breakout, but it usually follows the dominant trend. However, if the post-breakout move is not significant, there is a high probability for a reversal towards the structure’s boundaries.

With the RSI and the Average Directional Movement Index (ADX) in sleep-mode, the focus turns to the stochastic oscillator once again. Quite uniquely, this indicator experiences the formation of the same pattern as seen in the stock price action, thus failing to provide extra information on the next move.

Should a bearish breakout take place, the stock bears would quickly come up against the 50-day simple moving average (SMA) at 9.56. Lower, the busy 8.96-9.15 area set by the 23.6% Fibonacci retracement of the February 10, 2022 – October 3, 2022 downtrend and the August 17, 2022 high respectively should test the bears’ resolve.

Should the bulls manage to retake control of the market, the initial target could come at the 9.90-10.04 area defined by the September 30, 2016 low and the 38.2% Fibonacci retracement. The path higher looks clear until the 10.47-10.69 range. If this area’s resistance proves to be a low barrier for the bulls, they would then have the chance to address the gap that formed on March 10, 2023.

To conclude, the Deutsche Bank stock is ready for a breakout. However, both sides appear extra hesitant as a low conviction move could backfire leading to significant losses.

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