March 18, 2010
Shares of Dell Inc (NASDAQ: DELL) made four consecutively lower daily highs since reaching a closing rally high back on September 16, 2009 at $16.92.
Drawing a line between these highs, end extending it to the right side e chart; you get a declining trend resistance line. The dates of these highs are; Sept 16, 2009, Nov 18, 2009, Jan 12, 2010 and Feb 18, 2010.
Shares also made a double bottom, reaching lows of $12.74 on Dec 9, 2009 and then again at $12.75 on Jan 29, 2010.
This also creates a pennant formation by drawing a line between these lows and extending it to the right side of the chart.
After the last lower rally high, Dell declined to a “higher” correction low. Then Dell advanced to the declining trend resistance line (upper declining pennant line) and traded right at that line (using closing prices) for six trading days.
On Wednesday March 17, Dell broke out of these patterns with a bullish breakout by rising well above the declining trend resistance line (upper declining pennant line) and closing well above it.
The new target for this advance is $15.45, a 5.9% gain. A close above $15.45 would likely result in an advance to the prior September highs up at $16.92, a 16% gain.
Disclosure: The Fibtimer.com (www.fibtimer.com) Stock Timing Strategy holds a position in Dell Inc.