Jim Cramer responded to a caller asking about Deutsche Bank (DB) during his fast-paced "Lightning Round" near the end of his Mad Money program Monday night. Deutsche Bank: "You need a recovery in Europe. I don't want you to buy it right here." Did Cramer look at the charts before nixing a buy recommendation on DB? Maybe, but let's go over the charts today and see what they are showing.
In this daily bar chart of DB, below, we can see a downtrend in place the past 12 months - lower highs and lower lows. Prices are currently above the bottoming 50-day moving average line but still well below the declining 200-day line.
The volume pattern this year shows weaker and weaker highs which is not what the bulls need.
The daily On-Balance-Volume (OBV) line has been weakening the past year and has only been "holding on" the past two months.
The Moving Average Convergence Divergence (MACD) oscillator has spent much of the last 12 months below the zero line and this February is no exception.
In this weekly bar chart of DB, below, we are not finding positive signals. Prices are below the declining 40-week moving average line.
The weekly OBV line is still in a longer-term decline and the MACD oscillator has not been above the zero line for more than a year. Nothing bullish looking here.
In this Point and Figure chart of DB, below, we can see the decline in price and many rally failures. This chart is not showing any base building or bottoming patterns or action.
Bottom line strategy: A low priced stock may seem like a bargain and we can get intoxicated with potential gains, but stocks need to be bought before they can go up. Keep your powder dry with DB.