Elliott Wave Analysis: Deutsche Bank Still Calling Higher
Elliott Wave Forecast | Feb 21, 2017 04:51AM ET
In September 2016, the media was calling for the collapse of Deutsche Bank (NYSE:DB), as its shares were dropping to new all time lows and investors were worried about another financial crisis. However, in our previous article, we were expecting a recovery for Deutsche Bank stock, as the technical picture was pointing to an ending diagonal taking place to finish at least the cycle from 03/14/2016 peak and start a short term bounce.
In the recent 4 months, Deutsche Bank stock managed to do an impressive +90% run, tearing apart theories about its crash and reaching our first target of the recovery at the 38.2% Fibonacci area $20.76. The move from September 2016 low can be labeled as 5 waves leading diagonal Elliott Wave structure which currently ended at 01/25/2017 peak and could be the first leg of an impulsive move or just wave A of a zigzag Elliott Wave structure.
As the stock was expected to correct the cycles from the lows, then a double three correction was put in place for the pullback to happen with the first inflection area coming at equal legs $18.83 - $18.45 where DB can resume higher or bounce in 3 waves at least.
Deutsche Bank bounced from the mentioned area and held below 01/25 peak, so as long as $20.94 stays intact then DB will be looking to make the double correction toward equal legs area $17.95 - $17.45 where buyers are expected to show up for at least a 3 waves bounce. The 50% - 61.8% area of the rally comes at $16.06 - $14.91 which can be in play if the next bounce fail below the previous peak.
Recap:
Deutsche Bank ended both 2014 and 2015 downside cycles and currently still aiming for higher levels in the recovery. The short term technical analysis for the stock using Elliott Wave Theory is supporting a bullish move to the upside after ending the current pullback which doesn't need to make the double correction as it already made 3 swings lower and could resume higher from current levels.
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