Stock of the day: BASF

In today’s analysis, we see a very handsome bullish occasion on German BASF, which the previous week was a mid-term gamechanger and was allowed to create a proper buy signal.

It’s not only about the previous week though. Here, many things aligned together and let me show you each one of them in detail. First of all, you can see, that the price is back above the up trendline (black). We are back as at the end of the year; the price went below this crucial support but it happened to only be a false breakout (orange). If you’ve been reading our analysis for some time, you know that false breakouts are great training occasions themselves and it’s the case here as well. A false bearish breakout became a great bullish occasion.

In addition, the price was correcting inside of the big wedge pattern (red lines), or a bit smaller wedge with the upper blue line. Both of the resistances were broken, which along with the false breakout gave a green light for buyers. This particular optimism here, along with the general positive sentiment on stocks right now is more than enough for us to be bullish on BASF. Our sentiment will be changed into a negative one, when the price drops below the up trendline but chances for that are now rather limited.