Stock of the day: Zalando

Today, we’ll talk about German e-commerce giant – Zalando. But before we get to that, we have to mention yesterday’s Fed announcement, for at least a little bit. So, the Fed did not disappoint stock traders and gave fuel for another upswing. In this environment, almost everything is going up, almost… because Zalando, for example, is struggling.

I’ll show you the daily chart and everything will become clear. Zalando is slipping lower because of the giant triple top formation. The sell signal we triggered in the middle of September when the price broke the neckline of this formation (black). We quickly managed to reach the 38,2% Fibo, which was confirmed as a support and allowed the price to climb higher for four weeks. The problem is this week the weekly candle is so far very pessimistic. Within the last four days, we managed to erase all the bounce and we’re back at 38,2% Fibo.

Sentiment is definitely negative and with this selling pressure, chances for a breakout and a further slide are quite significant. We stay bearish, as long as the price is below the 23,6% Fibonacci. This resistance seems relatively safe for now