As you all know, I don't post often. I do not have the knowledge to be able to add much to this board. It is the other way around. I learn from all of you. All I can do is pass on some thoughts for your consideration, based on my experience in the financial industry and the charts, which I live by.
I had been long DNDN since last April, and defended, on this board, the sharp rise in mid-January based on an analysis of the charts.
That is no longer the case. The fundamentals of the company have gotten better but the technical picture changed dramatically just 7 days ago. That is when I sold out my position.
We had an "Exhaustion Gap" in the last week of January and a "Double Top" on February 17. Since I must invest and trade by the charts, I had to sell on that signal. ( This is based on a one-year daily bar chart )
We are now in an extreme "Oversold" area based on the "Slow Stochastic" which I use in combination with the moving averages. We have not turned yet, and no 'Buy" signal has been given.
Living by the chart, a technician has two options. One can gamble and buy in this area, before the Stochastic give the signal, or wait for that turn signal. What the variables are at this juncture:
1. You get ahead of the turn and thus a better buy.
2. You jump the gun and the stock drops another buck to test the 50 day moving average, now at $11.30
3. The stock consolidates and moves sideways in this area and the moving average moves up to this level. The stock holds, and then begins its next leg up.
There is no question in my mind that DNDN is a stock to own for now and the future. What is happening now is simply a normal correction in a stock that has become very volatile.
I bought back in, part of my position this morning, to start my pyramid again. ( using an intraday, 10 day, 15 minute-bar-chart with slow stochastic) I will add if it drops again in a few days or if it consolidates here over the next few days or weeks and indicates the next move up is about to start. I can not pick the bottom.
We are in an area where it is hard to make the right move all at one time so a partial buy seems the most prudent. This is particularly true as we come into the tax selling season and normal Spring correction. I think the correction we have just had on the NASDAQ was a shallow one and simply is a precursor to a bigger one later in the Spring or Summer. I also think that DNDN has enough in its fundamentals to go its own way if we are fortunate enough to have more positive disclosures as the Spring season advances. Good luck to you all. wvw36
<<< We are in an area where it is hard to make the right move all at one time so a partial buy seems the most prudent. >>>
Many thanks for your valuable TA contribution to the board. You're very knowledgeable with your TA. I too made a partial buy this morning. If the price dips further, I'll buy more....
Please post more often. We appreciate your contribution. Enjoy reading your post very much.
Thank you very much for your thoughtful and informative post written in a calm, articulate and self-possessed way.
I have enormous respect for technical analysis. What holds me back with respect to its application to certain stocks like DNDN is the event-driven nature of their underlying companies. For example, and I myself do not expect it, were DNDN to announce its Partnership Agreement tomorrow, the chart situation will look quite different on Friday.
W V W, let me add my thanks for your careful analysis. You have helped us understand the volatility of DNDN. However, I think "satyamlo" has a strong point regarding TA's application to this stock. DNDN is truly an "event-driven" stock, and the the only thing that is unpredictable, in my view, is the TIMING of the event, not the event itself -- the event being a partnership announcement that we are all almost absolutely certain is near. If the partnership was built into the stock in the 14.50 - 14.98 range, then we are headed back there, and I am happy to accumulate during a $2-off sale.
It would be interesting to know how the board members think a partnership announcement would impact the share price. $15 ?? $18 ??
I highly recommend subscribing to BTM for at least six months. You can get your fundamental information through them, and trade around your core positions using your TA, which seems to be working well for you. BTM had the DNDN scoops today, although Realmoney at 11AM beat everyone to the rumor that had sent CEGE down starting at 10AM.