|We all know that the best time to buy a stock is when everyone out there is selling. This past week, the Dow did look as though it was in a correction, and let's face it, even "Dr. Doom", Nouriel Roubini, known for accurately predicting in September 2006 that the real estate bubble would burst, has called for a strong market correction. So, when the market corrects, what do you buy? DD is one share that you should keep on your watch list.|
|Figure 1. Omnitrader DAILY chart of DD suggesting a VOTE line BUY signal.|
|Graphic provided by: Omnitrader.|
|The chart in Figure 1 is an Omnitrader chart that has given a buy signal on the vote line based on the JM Strategy and the Red Green Strategy Long 6 shown in green below the Vote line. On July 1, 2013 the share price flirted with the lower band, suggesting that a buy signal was in the offing. The Vote line gave a buy signal on July 8, 2013, the same date that the TDIJak indicator gave a buy signal. The RSI gave a buy signal on June 26, 2013. All the signals would have been profitable with a sell signal given when the price broke below the Verve trailing stop on August 16, 2013. A fresh buy signal was given on September 4, 2013 as the price played with the lower internal band line. Another rise, with a Vote line sell based on the 12-period RSI non opt strategy was given on September 23, 2013. On October 10, 2013 a buy signal based on all the strategies shown in green below the vote line was followed by a sell signal on November 4, 2013 after the share price hit the upper band on October 25, 2013. On November 8, 2013 a buy signal was given based on the JM strategy and the Red Green Long 6 strategy, both shown in the green area below the vote line. The RSI indicator is above the 68 level, and the TDIJak indicator has not given a buy.|
|Figure 2. Elliott Wave count for DD.|
|Graphic provided by: AdvancedGET.|
|The chart in Figure 2 is an Elliott Wave count of DD, and suggests that the share price has completed a WAVE 5 and should correct somewhere between $60.25 and $56.25, the 4th wave of lesser degree. Note that the RSI indicator has not given a sell signal, suggesting that the price could go higher. The WAVE 5 shown on the chart also does not look correct, and is suggesting that an alternate count shown in brackets is a strong possibility. The price is currently also in a JM Internal Band buy. A JM Internal Band is a 15-period simple moving average offset by 2% positive and 2% negative. A break above the upper band is a buy and a move below the lower band is a sell. |
I would not be a buyer of DD at the present level, but would wait for a more definite Elliott Wave count with an RSI below the 32 level and giving a buy. This share is on my watch list.
|Address:||3256 West 24th Ave|
|Phone # for sales:||6042634214|
Click here for more information about our publications!