Deutsche Bank (DB) is the Stock of the Day at Real Money Monday with its shares down before Monday's opening bell after it announced an $8.3 billion 'Restart' restructuring program and about 18,000 job cuts. Deutsche Bank actually traded up a bit in June, but this is another month so let's check out the charts again.
In this daily bar chart of DB, below, we can see a pattern of lower lows and lower highs the past 12 months. Bounces lacked any staying power both in amplitude and duration. DB has crossed above and below the mostly bearish 50-day moving average line and recently closed above it. Prices have stayed below the bearish 200-day average line the entire time, with any bounces stopping well short of the underside of this indicator.
The daily On-Balance-Volume (OBV) line has tracked prices lower. The Moving Average Convergence Divergence (MACD) oscillator recently crossed above the zero line for a buy signal after a cover shorts signal in early June.
In this weekly bar chart of DB, below, we can see that the bears have been in control since late 2017. The negative slope of the 40-week moving average line has defined the price action for months. The weekly OBV line peaked ahead of the price high back in the middle of 2017. There is one positive on this chart -- the rising 12-week momentum study, with higher lows from early 2018. This tells us that the rate of decline in price has slowed for several months and suggests that a bounce or rally could develop. The length of this bullish divergence tells you that this indicator is not a good timing tool.
In this Point and Figure chart of DB, below, we can see a much longer downtrend. There are no signs of accumulation (buying) yet and a sustainable base pattern is lacking.
Bottom line strategy: Fundamentals are above my pay grade, but DB seems to be making the hard decisions to survive. I am not saying I would be a buyer of the stock yet, but maybe, just maybe, the bad news is out and we could start to think about the upside instead of the downside.
