Bobby, could you please elaborate a little more on your analysis of Dell? How do you got price target at about $10. Is it EW, support/resistance or something else?
By no means I'm a DellHead, I do not have any position in Dell as of now.
When Dell was at it's high at $55 200DEMA was at 30. Dell was 83% above 200DEMA. It would be reasonable to conclude that DELL could go 83% bellow 200DEMA after breaking it. So long-term downside target could be about $6. The next meaningful support from the current level is Oct 98 low of $20-21 ($41 pre-split). Fib retracements of the move from Oct98 to Jan 99 are $41.67, $37.5, and $33.37.
If you look for a bigger move, that move started at Oct 97 lows at about $10, which may serve as another significant support. Fib retracements are $37.81, 32.5, and 27.19. Some of those numbers are quite close which will make them even more significant.
Since July 94 Dell was bellow 200DEMA on the following occasions:
May 99, Oct 98, Oct 97, Jul 97, Jul 96, Oct 95- Apr 96, Jul 94. Most of times it just touched 200DEMA, except Oct95-Apr 96 when Dell went 50% bellow it.
To make things more confusing last weekend I've created a trading program that uses %R as one of inputs. Program gave a buy signal. I backtested to Jul 94. Results are fantastic (3900%). I wish I knew it back in 94:>) . For all that time system made only 7 trades, 5 long and 2 short. It had a buy signals on 11/10/95 @ $1.41, buy 11/27/95 @ 1.25, buy 12/17/97 @10.59; sell 02/25/98 @16.23; sell short 02/25/98 @ 16.23, buy to cover at 03/11/98 @ 16; buy 03/11/98 @ 16.00, buy 11/18/98 @ 31.94, sell 02/03/99 @ 53.94; sell short 02/03/94 @53.94, buy to cover 05/25/99 @ 35.00, buy 05/25/99 @ 35.00.
Look at chart to see Williams %R askresearch.com
Daily stochastics and MACD already oversold, but weekly ones just starting going down. Which means short rallies, until weekly indicators change or get oversold. Should I trust my program or use conventional stock analysis :>)?
I would appreciate your opinion about Dell, and could you recommend some good reading about EW.
Best regards,
Slava Chechik |
