Stock of the day: Deutsche Telekom

In today’s analysis, we are coming back to the Frankfurt Stock Exchange in Germany to analyze Deutsche Telekom, which is slowly approaching an interesting place to trade.

As you can see on the chart, the DTE is inside of the channel up formation (red lines). According to the technical analysis, as long as we are inside the channel up formation, the sentiment has to be positive. The price is approaching its lower line and that is actually our first, most probable scenario, so buy when the price will bounce from the lower red line. That is really the bread and butter of price action.

On the other hand, we should brace for a breakout. Not that it’s likely to happen but just in case, it’s good to have a plan B as well. In case of a breakout, the sell signal will be triggered. Not a major one though as slightly below we have a crucial support on the 17.3 EUR (yellow), which looks strong. Only the breakout of that horizontal support would bring us a proper sell signal.

So far, so good. Chances that the price will drop lower are not very high. Sentiment stays positive as long as the price will move higher inside of the channel up pattern.