Stock of the day: E.ON

In today’s trade we’re back on the German market, where Wednesday is a correction day, at least during the European session hours, while the start of the American session brings us a promising bullish bounce.

And from the German market I have a great occasion on the E.ON, a leading company in the German energy sector. What we have here is a giant head and shoulders pattern that started in March of this year. The pattern is already fully created and we already have a breakout of the neckline.

You all know that from a technical point of view, that breakout gives us a proper, long-term sell signal. What is more, the price already tested the neckline from the bottom and was unable to come back above it, which confirms a negative sentiment on this instrument.

As long as we stay below the blue line, the sentiment is negative. The price coming back above this resistance will cancel the negative sentiment, but chances of that happening are rather slim.