Patterns: AAL.US/USD, DEU.IDX/EUR
|American Airlines declines in pattern
The stock price of American Airlines has been declining in a channel-down pattern since March 2021. Note that the both times the price reached the 2021 high level at 26.10 occurred in the pattern's borders. More recently, from July up to late November, the rate was fluctuating between the resistance of the 22.16/22.20 zone and the support of the 18.30/18.96 zone.
At the start of December, the price passed the support zone and declined to the 16.20 level before retracing back up. On December 7, the stock had reached the 18.30/18.96 zone and tested its capability to provide resistance.
If the resistance of the 18.30/18.96 holds, the stock price of American Airlines would most likely decline. A potential target for a decline would be the 14.00 mark, where a 2020 low and high-level zone was located at. However, note that during the price surge at the start of 2021, the price was finding short-term resistance and support in various round levels in the range from 14.75 up to 16.50.
On the other hand, a breaking of the 18.30/18.96 resistance might result in the pair testing the 50-day simple moving average at 19.90 and the 20.00 mark. Above these levels, the upper trend line of the channel down pattern and the 200-day simple moving average might act as resistance near 21.20.
Germany 40 index recovers
Despite being shortly pierced, the support of the 15,000.00 held. After trading above the support level for seven trading sessions, on December 7, the Germany 40 index recovered. The passing of the resistance of the 200-day simple moving average resulted in a 2.80%.
In regards to the future, the index could first test the 2021 August and September high-level zone that surrounds the 16,000.00 mark. Above the 16,000.00 level, the price might find resistance in the all-time-high level at 16,300.00.
On the other hand, a bounce off from the August and September high-level zone would highly likely result in the index looking for support in the 50-day simple moving average near 15,650.00. Below the 50-day SMA, the index might find support in the 200-day SMA near 15,500.00. If both of the SMAs fail, Germany 40 index could once again reach the 15,000.00 mark.
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