DELL COMPUTER--INCREDIBLY OVERVALUED STOCK Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : DELL COMPUTER--INCREDIBLY OVERVALUED STOCK

DELL 125.88

-1.6%

Dec 31 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext

To: Candle stick who wrote ()	8/4/1997 10:33:00 AM
From: Candle stick	of 96

From a technical perspective, Dell has made an incredibly sharp runup from near 20 to 173 1/2, presplit. Current price is 84 (equivalent 168). This is an eightfold rise in 1 year, and a P/E expansion to 50. On July 25 (coincidentally the day of the split) DELL formed an 'engulfing top' while at the same time opening at all time highs of 173 1/2. It closed over 10 points lower at 163 after hitting a low of 160.(All prices are pre split). In my opinion that was the top. The stock continued to fall to a low of 154 (77), and is now returning to try the high at 86 3/4 (173 1/2 presplit) DELL has been unable to touch this level its last few attemps. Momentum is extermely high and has been so for an extraordinarily long time. The engulfing top took place outside the bollinger bands, also a sign of overextended prices. I believe at this point that the technical picture supports being out of your longs, and is good enough to be short the stock as well. This failed attempt at the highs provides an excellent opportunity to establish short positions. At a minimum I would look for a move into the low 60's. Given that this is a 'darling stock' that is run by momentum traders, once the momentum shifts, the lows could be significantly lower. If earnings growth were to slow or even just stabilize, then I believe the stock would correct at least 50%.....best of luck to all...;^)

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext