Technically, this is a positive sign in the short term, but for the future we must remain cautious. BMW, like the entire European auto industry, has suffered substantial losses this year and is not showing exceptional price movements within the sector. However, with the strong support at €68 as a base, we can expect a short-term rebound towards €87. This would be a technical recovery within a downtrend.
In addition, we have previously pointed out the risk of a W pattern, which means that the price may experience a volatile decline after an earlier M formation. This technical analysis fits closely with the challenges facing the company. It seems that at BMW the so-called poison cup is not yet empty.
Below is the chart of BMW with the expectation and possibility plotted. The gray arrow is the first line of the W.
Below is the image that shows the M pattern (late 2022-present) which may be followed by the W pattern as plotted with gray arrowsand we discuss below.
Conclusion
For the short term, we expect a technical recovery to €87. After that it becomes watchful. BMW's problems will most likely not be solved in the short term. As soon as the price drops below € 68, it could fall back to the old bottom around € 40.
Here comes the long-term buying moment where we have to take into account a rebound to €58 and then another rebound to the €40 level to then complete the W pattern through a sharp rise to at least €68 and possibly through to €87.
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