DWA view on DELL as featured in "from the analyst"..cheap seats version..Thanks TOM!
Dell Computer & Dow 10,000
Dell Computer Corporation designs and manufactures personal computers. The company produces a variety of computer
systems based on Intel microprocessors. This stock is in the Computer sector which is currently in Bull Correction status at
34%. The sector is in a column of O's indicating that we do not possess the football. However, just 4% lower and we are in
oversold territory so while there is still downside potential in the sector, we are starting to reach the end rather than the
beginning. This bullish percent chart can be accessed from the Bullish Percent Charts link on the left hand side of the Main
Page.
With DELL, investors will want to wait for a few things to develop. First, look to the sector bullish percent chart to reverse
back to the upside indicating that we have the football and can run plays. Second, wait for the trend chart to improve.
Currently, the chart is trading well above its bullish support line. In fact, that line is so far underneath that you have to use the
expanded chart to see it. On our system when a chart first comes to screen it is fitted to print on one page but if you select the
EXPAND button on the left hand side of the chart you can see all of the chart that we have on DELL. This way you can scroll
left/right and up/down to see that the support line will be encountered at 17 1-2. You can see in the chart below that the stock
topped at 55 and since has headed south making lower tops and giving sell signals. This indicates that supply is in control
and that lower prices are likely.
In addition, the Relative strength chart, while still on a buy signal, is in a column of O's indicating that the stock is
underperforming the averages. To see the relative strength chart, simply click the RS Chart button in the upper left of the
chart. The RS chart is only updated once a week using closing data on Tuesday so if you want to know how the RS is
progressing during the week you can click on the link at the top to see a current calculation of the Relative Strength. The
dates that are highlighted are Tuesday's which are used in updating the relative strength chart. For more on RS charts, be sure
to check out the PnFUniversity on the Main Page. In any event, the RS chart still has a way to go before it reverses back to
the upside.
This is certainly a stock to look at when the sector reverses back to the upside as it has been a leader in the past. However,
we will want to see demand in control making commitments. One way to watch DELL (or any other stock) to make sure you
see any changes on a technical basis is to put it in a portfolio. You can access the portfolios by clicking on the View and Edit
Portfolios link in the upper left of the Main Page. Here you can put stocks (and Mutual Funds) of interest in a portfolio. Each
day you can check the ACTIVITY of the portfolio by selecting the ACTIVITY button. This gives you any changes in group
status, P&F Signals, 50 and 200 day moving average crossings, RS changes, momentum changes, trend violations and more.
If you have any questions be sure to use the PnFology Bulletin Board to leave questions or comments. It's a great place to
learn!!
The long and short of it with DELL is that the sector needs to improve. This is measured by the Computer Sector Bullish
Percent Chart. When it does we will want to make sure DELL's trend and RS charts have improved and if so if there is a
decent entry point which allows for a good risk reward. Here is a chart through Monday March 29th, 1999.
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