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Duoyuan Global Water Inc. Message Board

  • warrlock2001 warrlock2001 Dec 20, 2010 12:39 PM Flag

    DGW - Current Technicals

    This stock is definitely in a period of consolidation and in a very tight range, which suggests that a big directional move is imminent. However, it has formed an unmistakable bottom wedge, trading below both major moving averages, which I do believe will break to the downside.
    Resistance is $13.19 and support is $11.91 a strong volume move above or below those thresholds will be very rewarding if you are on the right side of this.

    This would present an excellent straddle opportunity. Just the same. If you are long, it would not hurt to purchase put protection.

    Because of the declining money flows, somewhat slightly overbought indicators and increase in negative volume, I have decided to open a long put position for the March $12.50 strike.

    I may consider that straddle after further analysis.

    As always, one should do their own diligence when deciding on an investment. As I know nothing about the fundamentals of this company, I cannot comment, but the market has clearly punished this stock for some reason and the market now agrees with the valuation until the next change in fundamentals.

    Good luck either way

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0.058-0.025(-29.70%)Sep 18 3:16 PMEDT

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