Stock of the day: RWE
24 February 2023
We will finish this week with an analysis of the German energy giant RWE where we are getting closer to a major signal, but the direction is still largely open. The price is in a sideways trend and should decide on the direction soon.
The sideways moving RWE formation is the symmetric triangle (black) that started a year ago and will most probably continue for a few more weeks. Recently, the price bounced off the lower line of this formation, which implies that the test of the upper line is incoming. This, however, doesn’t make it the main occurrence here -in case of triangles, one usually waits for a breakout from the triangle, not for the moves inside.
The way to trade it is pretty simple – a breakout of the lower line of the triangle would give us a long-term sell signal and a breakout of the upper line of this formation would give us a clear signal to go long. All we can do now is wait and see what’s going to happen, most probably in March.