Stock of the day: BASF

The first analysis of the year goes to the German BASF, which we already analyzed on our portal a few times before. The last piece was from July when the price was testing long-term lows. Back then, we were quite optimistic and we saw a chance for a promising bullish move. This is how we concluded the previous piece:

“BASF is on lows from 2020 (orange) and on this support, the price is currently creating a hammer candle on the weekly chart (green). Such a pattern in such a place can be the start of a new bullish trend or at least a correction.”

It was spot on, that low was THE LOW. Since the middle of July, the price is climbing higher. IT did not start straight away though. BASF had to create a double bottom formation (blue) first. Currently, the price is trading around a key long-term level of 46 EUR (yellow), which is working as both: support and resistance since March. Currently, after escaping from the flag pattern (black) to the upside, the price is above that support and is having a very promising buy signal. If buyers will manage to close a day and a week above the yellow area, we will get a proper buy signal here.

On the other hand, price breaking the yellow support and closing below the green line would be a signal to sell but that scenario is currently less probable.