Deutsche Bank has rallied 59% since our bottom call on Sep 27 [see: Deutsche Bank: Will it Survive?]  It’s all the more impressive since it has occurred against a backdrop of the troubled European banking industry.

Several weeks ago [see: Deutsche Bank – All Better?] we called for a 7% correction following a Butterfly Pattern completion and were promptly rewarded with a 7.6% drop.

We’re now at another one of those nifty inflection points here at 18.78 where DB should at least put in a meaningful pause, and possibly much more.

continued for members…

Note that DB has left a trail of gaps in its ascent, with the most recent at 16.68 — an 11.1% drop from 18.77.  I would, therefore, set an interim downside target of 16.68-16.90 on or about Dec 15-16.  If the fallout from the FOMC decision isn’t too bad, DB should continue on up to 20.43 in mid-Jan.

If DB makes a meaningful reversal here, the rising white channel I’ve sketched in should take form – opening the door to a deeper backtest and fleshing out the rising white channel. It emerges from the falling red channel around Jan 13 at 14.30ish.  But, the more conservative target would be the midline at 16.90.

GLTA.