Dell Inc


Commentary: DELL has experienced a sharp decline since breaking below its 200 DMA back in mid-August 2005. But as you can see from the chart below, DELL has bounced off the support of the $28.60 level twice in the past four months, which could now be seen as a sign that the selling pressure may be coming to an end. Note that the price of DELL stopped at a low of $28.62 in early November and a low of $28.69 a few days ago. Technical traders could use these nearly identical bottoms to signal the beginning of a double bottom; as a result, they will watch for a move toward the resistance near $33.

We've also added the MACD, which has recently crossed above its signal line. This bullish sign could be used by the bulls as an indication of a move higher, but what is more interesting is how the MACD has failed to create a nearly identical low like the price of the stock did. This positive divergence also indicates that we may see DELL head up toward the resistance (dotted line on the chart).


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