Stock of the day: Siemens

Today, we owe you a small update on Siemens, an instrument we discussed back on September 7^th. Back then we were bullish, and we owe you the update because its buy signal was fake and buyers got caught in the classic false breakout.

A false breakout is labelled with blue colour and is as typical as it can get. The price broke the horizontal resistance on the 144 EUR and then made a double top formation before falling back below this support (grey). False breakouts are usually very strong signals to open trades in the opposite direction, so we shouldn’t be surprised that the price fell with great momentum, breaking the crucial support – long-term up trendline (red).

Putting all that together, with a false breakout and the price being below the red line, we do have a proper sell signal here. The negative sentiment stays, as long as the price stays below the red line. The chances of that happening are quite significant.