"The donated righteousness and the effectual renew are not a Christian's 'own' in the sense that he can keep them in his possession or because they constitute permanent qualities in him. He is renewed and made righteous only on condition that he is one with Christ, that he remains in Christ, and that his righteousness permanently flows from Christ. The mode of having this donated righteousness. through a union with Christ and not by means of one's own permanent quality of righteousness, demands that a Christian direct his attention away from himself and toward Christ. He can be continuously righteous only if he continually reasserts his trust in Christ."
As to whether Luther's theology is compatible with theosis, I am not convinced that Luther went that far, although a few of his statements certainly suggest it. He undoubtedly taught that the Christian participates in Christ, but that is not the same as "union with Christ" or "deification". Indeed, there are plenty of quotes that indicate that he believed the exact opposite; namely, that the justified man becomes more human when justified. After all, can a man who wrote, "We are to be human and not God - this is the summa", really be a proponent of theosis?