Stock of the day: Allianz

Today’s update is focused on Allianz, one of the biggest insurance companies in the world and listed on the Frankfurt Stock Exchange in Germany. We wrote about Allianz on October 4^th, and back then we were optimistic saying:

“So now, we’re back above the up trendline and the crucial horizontal support on 190 EUR. We also broke the upper line of the wedge (upper green), which gives us another confirmation of the positive sentiment. With all that in mind, we’re optimistic about this asset and we think that the next few weeks should be bullish.”

Another good call, because yesterday the price managed to set new monthly highs. Yesterday’s candle is important because we also managed to break crucial horizontal resistance on the psychological barrier of 200 EUR (green). With all that in mind, we have a fresh, and legitimate buy signal.

One thing worries me though. Today’s candle. It’s an inside bar with very small volatility. Usually, after a breakout like this, we should see the price making new higher lows and higher highs. That would just prove the point here. We don’t see the kind of price action that may raise worries about a possible false breakout.

Investors should stay sharp here and look for any signs of weakness and any possibility of a false breakout. I think that the price closing a day below yesterday’s opening would be a sign of weakness and if that would happen, the buy signal would get cancelled immediately.