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by Darius Anucauskas

Looks Like A Double Bottom On BMW

BMW shares have been in a down move from the beginning of this year and it seems that the German automaker could close the year in the red. But there could be a chance for the bulls, as the current slide got held near the 72.25-euro price tag for the second time during the past three weeks. From the technical perspective, looking at the BMW (ETR: BMW) daily chart, it seems like the stock is forming a double bottom pattern, which could lead to some more recovery later on. But before we start assuming that this is a double bottom formation, we would need to see a break of the “neckline” first, which is around the 79.10 barrier. Until that break happens, the stock could just be forming a range, hence why we will stay cautiously-bullish for now.

The BMW stock is not far from testing the 75.10 resistance zone again, which was yesterday’s high. If the price travels above it, this could be a good sign for more buyers to join in, as this could clear the path to the next potential area of resistance near the 76.35 area, marked by the high of last week. If that area gets violated as well, the buying momentum could drag the share price towards the above-mentioned “neckline” area, near the 79.10 mark. This is where the stock could stall a bit, until the bulls and the bears decide who gets to sit behind the steering wheel.

The RSI, even though slightly below 50, has recently moved from the lows near 20 and continues to point higher. The MACD, although still in the negative zone, is showing signs of bottoming that could transform into a move higher in the short run.

The alternative scenario here would be if the BMW stock ignores everything we said above and breaks below the 72.25-euro mark, which could be a sign that the buyers still don’t see any value in the stock near that price. Such a break may confirm a forthcoming lower low on the daily chart and might push the price towards the 70.35 obstacle, a break of which could put more pressure on BMW AG and drag its stock towards the 68.75-euro price level.    

BMW daily


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