May 29

Deutsche Bank to Continue Experiencing Corrections

Deutsche Bank (XETRA:DBK) advances on Thursday aided by investors’ confidence in the cost reduction plan announced at last shareholders’ meeting.

From the technical viewpoint, the mid-term picture under the Elliott wave perspective exposes an ascending corrective structure that corresponds to a wave B of Minute degree labeled in green, which suggests further corrections in the following trading sessions.

DBK, in its 2-hour chart, unveils an incomplete mid-term corrective structure, which began on February 14th, when the German bank topped at €10.37 per share, the price started to plummet easing over 57%. Deutsche ended its first decline on March 16th when the German bank found fresh buyers at €4.449 per share. Once Deutsche Bank found support, the price started to rise in a complex corrective structure, which looks like a double three.

According to the Elliott wave theory, a double three is a combination of corrective patterns. This type of structure tends to appear in waves 4 or B. In the 2-hour chart of Deutsche Bank, we distinguish an ascending channel where the price action currently runs in wave ((y)) of Minute degree labeled in black. At the same time, its internal structure reveals the progress in its wave (c) of the Minuette degree identified in blue.

The internal structure corresponding to wave (c) seems incomplete. In the figure, we observe the advance of DBK’s price in wave iii of Subminuette degree labeled in green. On the other hand, the progress followed by the RSI oscillator, which exceeded the level 80 in the Wednesday session, leads us to confirm that DBK reached the end of its third wave of Subminuette degree in green.

The German bank could find resistance in the area between €8.464 and €8.650, which could act as a pivot zone. The region identified in the blue box marks the confluence with the upper line of the ascending channel. Consequently, a potential thrust over the upper line could be indicative of the end of the wave ((y)) that belongs to a double three pattern. Then from this potential movement, Deutsche Bank should resume its declines developing its wave C in green. Finally, considering the alternation principle, observing the significative extension of the first decline, and the subsequent potential decline corresponding to wave C, this move should not be as extended as the first decline.