Nice Divergence Trade On DELL

  • July 20, 2004
  • Tsutae Kamada

If you can see it clearly on a chart, chances are that many other traders are
thinking about the same trading strategy. Of course it is not wise to jump on a
stock with the crowd, but one person cannot move a stock.

10:26:31

Daily Setup Alert

Dell Inc (DELL) is challenging its resistance level near 36. DELL is now
trading at 35.82, up 0.15.

As you can see on the daily chart, DELL has a clear resistance level at 36.
It traded as high as 35.95, but the ceiling was too strong to overcome. The ADX
is indicating only 12, and the flat moving averages tell us DELL has no clear
trend.

Now, shift to the 5-minute chart. You could have sold sort DELL as soon as the
stock failed to break above 36. Notice the RSI is diverging from price movement.


Again, if it is obvious on a chart, others are thinking the same thing.

Tsutae Kamada