Elliott Wave analysis of Deutsche Bank’s stock price chart suggests that the decline into January 2009 finished with an extended fifth wave. Of all the patterns that one can use to anticipate future moves, an extended fifth wave is probably the most reliable. (See for example, Fifth wave extensions can make you rich)
The attached chart shows you how the internal waves of Deutsche Bank’s stock price movements are all related to each other, and it is fascinating, to say the least. We have already seen a relatively quick recovery to around EUR 55.25, which is, in my opinion, just the first leg of the move required to correct the whole sell off. Elliott Wave theory suggests that extended fifth waves experience what is known as a double retracement. What this means is the trader (or investor) should be prepared for a retest of the fifth wave bottom (occasionally even an overthrow!) But once the second test of the low is achieved, we will see an even quicker recovery than the first rally. The earliest target for the recovery is put at the wave 2 level of the extended fifth wave. This comes at EUR72 (or USD95 using today’s exchange rate).
For those who wish to see a fundamental view on Deutsche Bank, I suggest stopping by at Tefris.com