February 10, 2010
Shares of Dell Inc (NASDAQ: DELL) have made two important lows over the past three months. A break of either of these lows would result in considerably lower prices.
Dell has a huge share of the personal computer market and weakness in this company could be translated into weakness ahead for the entire technology sector.
On December 9, shares of Dell reached a low of $12.74 in intra-day trading. On January 29, shares of Dell again declined to this level, reaching $12.75 intra-day.
This makes a very definitive support level and one that has not been broken since back in July, 2009.
Should Dell close below $12.74 in coming weeks, we would expect substantial selling to take shares much lower, to at least $12.44 and likely to the $11.35 level.
Dell needs to close above $15.00 a share to renew its prior uptrend, something that appears unlikely in the current economic environment.
Disclosure: No positions