Stock of the day: BASF

We’ve had the stock of the day series going on long enough to be able to come back to our old analysis! We’ll use this opportunity to cover BASF again. BASF is one the biggest companies in Germany.

We wrote an analysis about this instrument on the 22nd of June. Back on that day, the situation was not clear and we had two possible scenarios. One seemed more probable than the other.

“The technical analysis is pretty clear here. As long as we stay below the orange resistance, the sentiment is still negative. The buy signal will be triggered, when the price breaks the orange resistance (which would mean a false bearish breakout) and when the price breaks the upper line of the wedge (which will mean the end of the correction). The second option seems more probable.”

Well, you will probably not be surprised to hear that the scenario that we were rooting for happened. The price indeed broke the orange horizontal resistance and then the upper line of the wedge. As we’d said before, that gave us a buy signal. It all happened on Friday, so the signal is still fresh.

Today, traders are giving up those gains a little bit, but the situation is still under control. At least as long as the price stays above the orange line, which will now be considered as a closest support. Long story short, the buy signal on BASF is on!