Greetings again to all DCTH traders that have been following me off and on again during the past few years.
It does seem that chart-wise DCTH has turned the corned. I have read the fundamental reasoning for the stock heading higher but as a chartist I let the charts tell the story.
As of yesterday, the chart story is now positive. Not yet bullish, but positive. The stock has done a lot of positive chart work these past 4 weeks having broken above the 200-day MA for the first time in 2 years on March 4th and then testing that line successfully 4 times since with the repeated drops down to 1.60 which is where the line is at.
The last time the retest of the line occurred was Thursday and the stock generated a reversal day off of that retest followed by additional buying yesterday and today. Yesterday, the stock closed above a minor but repetitive daily close resistance at 1.80 that goes back to July2012 and that has proven to be minor resistance on 3 prior occasions. The break above that level will bring additional buying with a short-term objective of 2.13 and the decent daily close resistance at 2.00.
The chart has not yet gotten bullish but it was done enough to scare away the bears, at least as far as pushing the stock toward the recent lows. Simply stated, the chart now has turned the bias slightly to the bulls.
The 2.13-2.31 level, on a daily closing basis, is powerful resistance having caused 3 major peak high daily closes during the past 11 months. As such, the trend will not turn bullish until the stock can close convincingly above 2.31. Nonetheless, this rally should give the bulls enough ammunition to attempt that in the coming days.
On a very positive note, the 200-day MA, as well as the 50-week MA currently at 1.70, have both been broken and that makes it a "double whammy". It should be mentioned that in Feb2012 the stock did break above the 200-day MA and did stay above the line for 24 days before breaking down.
Nonetheless, the 200-day MA line was only tested once successfully and on that occasion the 50-week MA was not broken. On this occasion the line has been tested successfully 4 times and the 50-week MA has been broken, suggesting this is a "true" break and one that will likely turn into a bull trend.
I do believe the stock is now on a breakout and that further upside will be seen. I believe the stock will soon close above 2.31 which would suggest the target will be $5 which is where the 200-week MA is currently at.
I am still long 6000 shares, so good luck to us all.