European bank stocks have been in the pressure cooker since the financial crisis of 2008-09. Some banks could be considered too big to fail, and certainly Deutsche Bank could fit that category. This company has a plethora of debt to service and just cannot seem to find a way out to make money for shareholders. When the stock took a nosedive this summer, many thought the bank’s days were numbered. Its collapse would likely have set off a catastrophic event in Europe and potentially around the globe.
The stock bottomed in September on some very big volume, a move that signals it has finally hit bottom. Since then the stock has recovered nicely, rising about 40% on improving technicals. In fact, the setup I see on the weekly chart is the best I have seen it for Deutsche Bank in the past two years – and that includes when the stock was 100% higher than it is now. There is quite a bit of momentum here.
We recently saw a slew of call buying activity, mostly for 2018 at the Jan 27 strike. That is about 60% higher than the current price – not a bad gain in twelve months.
However, first things first. Deutsche Bank has to break through 20, a major resistance area for now. With the MACD on a strong buy signal and solid relative strength (the best it’s been since 2014), we are bullish on this name.
Deutsche Bank (NYSE: DB) Video Chart Analysis
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About Deutsche Bank
Deutsche Bank AG provides investment, financial, and related products and services worldwide. The company operates through Global Markets; Corporate & Investment Banking; Private, Wealth and Commercial Clients; Postbank, Deutsche Asset Management; and Non-Core Operations Unit segments. It offers a range of financial markets products, including bonds, equities and equity-linked products, exchange-traded and over-the-counter derivatives, foreign exchange, money market instruments, and securitized products, as well as mergers and acquisitions, and debt and equity advisory and origination services; and commercial banking, advisory banking, and financial services. The company also provides investment and insurance, mortgages, business products, consumer finance, payments, cards and accounts, deposits, and mid-cap related products, as well as life and non-life insurance products, and corporate pension schemes; payments, financing for international trade, lending, trust, agency, depositary, custody, and related services; invests in a range of asset classes, including equities, fixed income, real estate, infrastructure, private equity, and hedge funds; and offers customized wealth management solutions and private banking services, such as lending and discretionary portfolio management. As of December 31, 2015, it operated 2,790 branches in 70 countries. Deutsche Bank AG was founded in 1870 and is headquartered in Frankfurt am Main, Germany.