Dell is up about 60% of the drop from $18 to $9 AND it has reached our initial target of $13+ with ease. A sell even if it may go much higher.
On the 27th of Sept. we thought this was a buy with a target of about $12.50. This too looks like an a-b-c or alternatively something better. Should have a 4 and 5 to finish c. Sell now if 25% is ok or wait for $13 plus. Remember that my targets are only first targets, that is minimum targets that should materialize under all circumstances.
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 P/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.
Dell has completed, or is about to complete, a very clear 5 wave sequence down. It could go the extra 50 cents to get right to the channel line but that should do it. A rebound to at least $12.75 should be anticipated after that, even if the stock drops unexpectedly to , say , $9 or even $8. That would be good for a 25% return no matter what!
Looking at the big picture we have an a-b-c down from $53 to $8 or so. That is a nice bear move in and of itself so it may indeed be complete. We assume for the moment that it is and since that point the stock has done a first wave up in a new bull followed by a rather long a-b-c wave 2. If correct wave 3 should follow and the upside is considerable larger than the 25% indicated.
There is , however, always the possibility that the a-b-c or double zig-zag correction could become more complex than it already is by adding a third a-b-c. That would make the $10 level the bottom of the a part with b and c yet to follow. The two previous b’s were good for $5 so why not this one too, so , in all scenarios, you should make at least 25%. Good luck!