50% retracement level for 52-wk chart is at $32-5/16, which also happens to be a resistance from early Sept.1998. Given the huge intraday run-up of over 75% from the lows only a month ago, some of this can be attributed to profit taking.
The candlestick formation from today is short-term bearish. Having spotted the bearishness earlier on in the day, I placed a series of sell orders (cascading, with more shares at higher prices) but only managed to sell 1/17th (a seventeenth) of my total position at $30-1/2.
For those of you who are holding the stock, I think that the current lack of liquidity will hamper your efforts to daytrade the stock. Until major funds start buying positions in DLGC, expect continued volatility with wide bid/ask spreads.
Personally, I have enough confidence in the company to buy back what I have sold so far (at lower prices, of course). I will continue to sell into resistance at $32-1/4 until I see evidence of that resistance being broken decisively.
It may sound contradictory, but I think there is better risk/reward ONCE it breaks resistance. Hence,
1) I would not mind selling 75% of my inventory as it approaches $32-1/4, and buying them back on dips.
2) As it breaks $32-1/4, I will only be holding 25% of my initial position.
3) I will sell the remaining 25% when DLGC approaches the next resistance at $34.
4) I will closely observe technical indicators like OBV and CHKO for accumulation/distribution patterns, and if all is still favorable, I will buy back 100% of my initial position around the "new" support of $32-1/2 (assuming that it trades back to those levels).
That's my trading strategy going forwards.
BTW, the average cost of my purchases of DLGC has been $19.37. I have quite a sizeable position in DLGC. |
