I want to disqualify DELL as a candidate because it has been declining already for a while, so I don't think there is much downside left. Let's take a look at my RET projections:
Long term, DELL is doing a double three (D3). Wave (y) is in progress, and the target range is quite large, potentially reaching $110, although that is brought into question now the stock hit $40 and began to decline strongly. Only further analysis of wave (y) could give us some clues as to where is DELL headed in the intermediate term, is wave (y) complete?
wave (y) in the previous chart is itself a D3, but is by no means complete. In fact, all we have so far is a zigzag UP which is labeled wave (w), and an elongated flat down. This elongated flat is (x), and may have concluded, or it is in its last stages. Note here the volume spikes at the time DELL reported bad earnings a few months ago, and how the stock has declined since. At that time, DELL would have been a valid candidate for my system. Today is a different story. Let's see if (x) is complete by examining it in detail, from the 52 week high in the next chart.
(y) is indeed a flat in the last few stages of wave "c". Note how the most likely trapezoid has been reached. In fact, it is unlikely that DELL may continue down much longer. Do I expect a snap back? Not necessarily. DELL should be making wave (y) up to new 52 week highs, but that could take months. The daily and the weekly charts are oversold, but the monthly chart seems to indicate that a bottom has not been made (take a look at your regular charts and share your thoughts.
6 comments:
Juan,
IBM have recently sold parts of their computer business. Perhapst they foresaw fierce competition in the laptop market. I have read somewhere that India have a project to produce laptops for a £100($175USD).
I just don't know on Dell.
Looking at the graph, you could go for a retracement. Or perhaps draw a trendline down and when the share recovers above it, then perhaps abullish re-entry.
Dell is 'bombed' out and AAPL is going skywards. Perhpas DELL could become a take-over target.
Just some thoughts.
I am watching RRGB with interest.
Did you see how GDT finally went down yesterday.
I shall post an updated 'Rolling Ramblings' at the weekend. It is time consuming to go through the trades.
There will be a retracement opportunity on all the rising Stocks hopefully.
When takeover speculation starts (Fortitude got it started here! hehehe). Take a look at the competitors and their market cap:
http://finance.yahoo.com/q/co?s=DELL
When the competitors have similar market caps, the most likely event is a merger where the resulting company is a combination of the two. These are less likely to happen because of CEO egos, IMHO. What do You think?
I am actually quite neutral on DELL, but I wanted to show a case where a volume spike accompanied by a strong decline, may actually signal the end of a trend. Such cases are better to avoid as per my system.
GDT again down close to $3.50, we should have netered that as well as DRIV.
I have now exited all my AMZN positions. The AMZN Stock has retraced close to 38.2% and I have taken an approximate $450 loss. It could now decline again to the low Juan has indicated.
Have you noticed RRGB. The problem as you stated before. The spread is so large.
Juan,
I have bought a CRC, with 2 DELL $30 Feb06 Calls and sold 1 DELL $30 Nov05 Calls for $3.30.
Two contracts on the strength of todays move up.
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