PureBytes Links
Trading Reference Links
|
Jim (or anyone else on MetaStock-List) please give me your opinion
about which channel DELL is in:
I draw a long-term channel with the support line running from the July
96 low through the lows of March and April 97. The resistance line
runs trough the highs of 9/20/96 and 12/10/96.
A shorter-term channel can be drawn with a support line through 1/2/96
and 3/19/96, and a resistance line through 12/10/96, 1/23/96, and the
top of just about every trading day for the last week. This short
channel is parallel to the 50-day moving average for the last two
months.
Question: Which channel will DELL follow? If it is the short-term
channel, then I should sell (or sell covered calls). If it is
following the long-term channel, then I should hold.
My opinion is that DELL will follow the short-term channel. Reasons:
1. That one is parallel to the 50-day MA.
2. For the last week DELL has been hugging the short-term resistance
line, and has been unable to break through. This line has strength.
3. With a PE of 34 it will be hard to grow at the steeper rate of the
long-term channel.
|