DELL update

DELL sept 27 2012

It is almost a month ago that we last commented on Dell. We commented that this is a buy no matter what but that it would probable drop another 50 cents or so to get to the bottom trend-line. Well it took a month but here we are, yesterday’s low was at $9.78, pretty well right on that line. To this we add our “keep-the-gap-in-the-middle” theory and voila, we have a perfect 5 wave sequence. Furthermore the RSI is not confirming the new low and the MACD is almost shouting from the rooftops that we went too far. The odds are exceptionally good that at the very least a rebound should start any moment now. If it does a first and minimum target is $12.50, a handsome 25% and well worth the trade (unless you are working with full brokerage, in which case you could lose half of it to your broker for filling your order). The /E is at about 5.8 . See also previous blogs.

For perfect clarity a buy now to a target of $12.50 does not imply a bullish stance for the long term. For all we know computers may go the way of the Do-Do bird and Dell with it, but not before this stock rebounds to at least $12.5.