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by Darius Anucauskas

Deutsche bank (ETR: DBK)

The market has recently been hit by the news that Deutsche Bank failed to identify its customers properly. Under anti-money laundering act, banks are required to vet their customers, who are supposedly involved in criminal activity such as money laundering. But recent reviews proved that Deutsche Bank was unable to identify such customers.

Even though there is a lot of negative news around the largest German lender, regarding this issue, some market participants actually see this as a potential buying opportunity. But before we consider that side, we would need to see the stock fulfilling some of our requirements.

Overall, the Deutsche Bank stock continues to trade in a downtrend, but the recent strong reversal from its lows on the 27th of June could draw us a totally different picture for the near term. As you can see, the shares continue to climb higher within a rising channel formation, which started around the 2nd of July. Even when the bank reported a 14% drop in net profit, the stock still continued to drift higher. This comes in line with the whole restructuring that the company is currently involved in, where one of the main aims is to drastically reduce their costs. In a way, all this could be seen as a positive for the near future of the stock.

From the technical side, for now, as long as the stock remains within a rising channel, we will stay positive. A push above the 11.280 barrier, could confirm a possible move towards higher levels. The next potential area of resistance to watch could be the 11.715 level, marked by the high of the 14th of May. Further acceleration in the price could lead to a test of the upper bound of the channel, or even the 12.205 zone, which was the highest point of April. This is where the stock could initially stall for a bit, until the bulls and the bears decide who remains in control from there onwards.

Alternatively, if the stock decides to break and close below the lower bound of the aforementioned channel, this could be a warning sign for the buyers and the key support area between 10.600 and 10.520 could get tested. If that area is not able to withhold the stock price from moving lower, then Deutsche Bank could fall to the 10.095 hurdle, a break of which could set the stage for a touch of the 9.445 line, which held the price from moving lower on the 13th of July.

Deutsche Bank chart


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