Hello Bruce (DELL)
Here's a chart to go with your outstanding comments:
*
73 X *
72 X O *
71 X O *
70 X O *
69 X X O * < Bearish Resistance Line
68 X O X O X < Buy Signal @ 68
67 X O X O X X O
66 X X O X O X O X O
65 X O X O X O X O X O
64 X O X O X O X O X
63 O X O O X O X O X
62 O X High Pole Top > O O X
61 O X O X * O < Sell Signal @ 61
60 O X X X O X * O
59 O X O X O X O X X * < Bearish Support Line
58 O X O X O X O X O X * + < Interm. Uptrend Line
57 O X X O X O X O X X O X + *
56 O X O X O X O O X O X O X +
55 O X O X O X O X O X O X +
54 O X O X O X O X O X O X +
53 O X O O O X O X O +
52 O X O X O X +
51 O X O X O + + < Revised Bullish
50 O X O X + + Support Line
49 O X O X +
48 O X O X +
47 O O X +
46 O X +
45 O X +
44 O X +
43 O X +
42 O X +
41 O +
+
In further of your comments from a previous post relative to trend lines. If a stock is above the Bullish Support Line and on a buy signal, I classify it as long and short term bullish. If it's on a sell signal, it's long term bullish and short term bearish. I use the same thinking below the Bearish Support Line.
On this stock you mentioned that the Bearish Resistance Line is in control. I agree but think this might be confusing to some for this reason: Dell is trading miles above its "Offical" Bullish Support Line, it's long term bullish, -- so some may wonder why we are discussing the Bearish Resistance Line? Especially since DWA always shows either an in charge "Offical" Bullish Support Line or Bearish Resistance Line at one time. They are never depicted on a chart as both being active. That is, when one ends, the other begins. Chartcraft on the other hand, will actually draw in an "Unoffical" Bullish Support Line or Bearish Resistance Line for visual purposes. Perhaps we should consider using "Offical" and "Unoffical" designations. (Or perhaps I should take another strong snort off my paper bag full of airplane glue and play back how the Seahawks got ref screwed in the Meadowlands.)
Bruce's Comments relative to the above chart as follows:
DELL update:
The HPT at $62 led to a short lived sell signal at $61 that met support from the Bearish Support Line at $59. DELL turned around and gave a buy signal at $68, but the immediate pullback was not a good sign. Further evidence that the BRL (currently at $69) is in charge of the chart. Important support is at $58 from an Intermediate Uptrend Line (IUL). A Short Term Uptrend Line is at $61. The BSL is at $50.
With DELL's RS bearish and with the stock trading below it's BRL, I would look to buy DELL for a trade closer to the IUL to ensure a better shot at short term profits. The next sell signal would be at $59, but with the IUL so close to that bottom, a sell at $59 would probably not cause too much damage. Of course, the overall health of the market would have to be taken into consideration.
From a long term perspective, which is the one that I personally operate under, I would need to see the BRL fall while the stock was on a buy signal. I'm quite sure that if the stock were to give a buy signal at $69, not only would the BRL be taken out, but DELL would be that much closer to reversing up on it's RS chart into an up column, a place it hasn't resided in since September.
All IMHO,
Bruce |
