Deutsche Bank (NYSE:DB) – This global securities and bank holding company, headquartered in Germany, recently had its earnings downgraded by Wall Street analysts as problems in the European community increase. It was recommended as a stock to sell in our “Stocks To Sell In May” monthly report. Technically, the stock completed a dreaded head-and-shoulders top on May 2 as it broke the neck line at $42.50. Since the high at the head of the formation is at $52, the approximate target for the breakdown is $32, where it found support last September.
For speculators, DB is a candidate for a short sale. Check with your broker about margin and other shorting requirements, including whether the stock may be borrowed. Short sellers also should protect a position by entering a stop-loss order. Other bear-market strategies consisting of puts and other hedges should be explored.
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