Since mid-September which was the moment when the scandal with CO2 emission came to light, shares dynamically fell and reached 86,36 euros per share. After consolidation that took few weeks, rebound has started. That rebound is supported by large volume. Currently average trading volume is 3 times greater than at the beginning of this year.
It is likely that VW shares are bought by significant investors. However often before new upward impulse there could be a long squeeze (sudden drop in price incites further selling) and return to upward movement.
The culmination of the decline was the disclosure of the emission affair, but as the chart shows declines started in March 2015.
Currently rebound didn’t reach even Fibonacci 38,2%. Price should test 140 euro level and 150 euro (Fibonacci 38,2%). Break above this levels and the closure of the September gap will be a strong buy signal and will confirm that the correction that lasted more than half a year has been completed.
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