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Diageo plc Message Board

  • stockineer stockineer May 30, 2013 11:34 PM Flag

    DEO TECHNICALS

    It looks like this message board is emptier than most, but since DEO's been on a run over the last year, I find it surprising. Personally, I haven't been familiar with it, but a reader requested that I take a look at the technicals. I put the discussion and charts up on Stockineer, but I figured I'd share the summary here with you guys.
    There is a very clear support level at $119.40, give or take a dime. The chart below shows the neckline as well as all the touches. The more touches, the more significant. So put this way, yes, you can buy right now because the support is strong. However, and pay attention to this…you must be ready to exit at a moment’s notice. If it breaks below that neckline, it could be very painful as it will then be a confirmed Double Top. This pattern has been forming for months, so it’s not to be taken lightly. If it breaks, there's a price target of $111, then $100. Indicators are a bit oversold right now, so I wouldn't be surprised to see a bounce to fill the may 28th gap. Here’s another look at the longer term charts. I wanted to illustrate how well trendlines have worked on this stock. Look at all the touches! As trendlines offered support, after they break, they show resistance. This is the perfect illustration of that fact. Unfortunately, the two primary trends have broken and it appears for the moment that a topping pattern has formed. Just like any other breakout, you don’t buy (or sell in this case) until the level is broken.
    Good luck guys. I've got no position in this, just sharing the technical information I see. I hope that support doesn't break.

 
DEO
111.09+0.07(+0.06%)May 1 4:03 PMEDT