For today's chart we've chosen to take a look at
Dillard's Inc (NYSE:
DDS) because it has created a series of lower highs/lows. Technically speaking, the structurally lower highs (shown by the horizontal lines) is an indication of a confirmed downtrend. As you can see from the chart below, the recent rally became
exhausted as it neared the resistance of the descending trendline, which is also an area that will continue to prevent agressive moves higher.
We believe that bearish traders will protect their positions by setting a stop-loss order above the nearby high of $20.66 because there is no technical reason to expect this downtrend to change directions. We'll set our short-term target near the January low, which is approximately 24% below the current level.
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