Dell broke the bearish trendline (trendline started in January) last Tuesday. It was a bullish sign. Furthermore, as we can see at the chart below, the breakout was produced after a three white soldiers pattern. It’s a bullish candlestick pattern that is used to predict the reversal of a downtrend.

This pattern consists of three consecutive long-bodied candlesticks that have closed higher than the previous day. These long-bodied candlesticks are a sign of the change in investor sentiment and are used by traders to confirm a shift in momentum. In this case, this pattern has been produced after a prolonged downtrend, so the bullish sign is very strong.

After the breakout, the price is heading towards next resistance level: $20,85, corresponding with the 38,2% Fibonacci ratio of the fall from January. It’s possible a pullback. It could be a good moment for longs.

Next resistence levels: $20,85, $21,69, $22,01.
Next support levels: $20,01 and the broken bearish trendline.

As we know, it’s usually a bearish chart pattern that is created by drawing one trendline that connects a series of lower highs and a second trendline that has historically proven to be a strong level of support.

But now, stock price is trying to break the upper trendline. Be careful if this breakout is confirmed, because stock price can rise… The upper trendline matches with 23,6% Fibonacci ratio of the drop since December, so it can be a tough level to be broken.

We will watch for a move over resistance level, although this pattern usually is broken below support level.

Tal y como decíamos, gracias a la decisión de la FED de bajar los tipos medio punto, Dell ha podido romper el rango lateral en el que se movía en el intradía. Tras romper por arriba, el valor ha pegado un fuerte latigazo al alza.

Según podemos ver en el gráfico de 5 minutos de Dell hoy, el valor se está moviendo entre dos cotas muy determinadas en un rango lateral: por abajo los 20,20. Por arriba los 20,63.

La estrategia ha sido clara: largos cuando se acerque a 20,20 y cortos cuando se acerque a 20,63. Sin embargo hay que tener en cuenta la decisión de ls FED de rebajar los tipos de interés en medio punto. Veremos si con esta decisión se puede romper por arriba o, al final, se mantiene este rango lateral.

As we can see in the figure below, the chart is breaking out all its supports, including 21,60$ support level today. We have to wait for the closing, but if this breakout is confirmed, stock price will continue plunging. The technical appearance is very weak, and next support level is very close: 20$.
Stock price has to rebound at this level.

If 20$ support level doesn’t hold, stock price can drop to 16$ level where a double bottom exists (2001 year).

Support level: 20$
Resistance level: 21,60$