To The Moon

Hi everyone. Today we’ll be looking at a very famous computer hardware and software company that has been partnering with Nvidia:

Dell Technologies Inc . (NYSE: DELL)

Since being publicly listed once more in 2019, DELL has seen 2 trend mark-ups. Note the 2020 trendline (in green) serving as the “base” trend, and the Mar’23 (in purple) and Mar’24 trendlines (in dark blue) serving as the mark-up trends. DELL also has multiple bullish island gaps, which shows the strength of its bullish uptrend.

Looking closer at DELL’s daily chart, notice how it has retraced more than 61.8%, but less than 78.6% of the move from 113.89 to 179.70. The market is still processing the earnings report which was released Thursday after the market closed. Usually, there is a “3-day” (or more) period of selling or weakness, and in this case we can see that DELL has not gone back into its trendline support, which is expected to find confluence with the 78.6% Fib retracement at 127.97.

Adjusting the Fibs on my lower timeframe chart to account for extended hours movement, I note that 128-129 is an area where DELL is expected to find a confluence of 78.6% Fib retracements. Given that the past 2 trend taps were confirmed with a bullish divergence, it suggests that the trend will not reverse until:

1. DELL hits 128-129; and

2. DELL forms a bullish divergence on the 4h

If we get both conditions fulfilled, DELL will most likely fill the 144.80-165.11 gap, and possibly head towards the extended hours ATHs at 185.74 over the next few weeks. Also note that there is an unfilled daily gap at 123.91-124.71, which could be a fakeout zone that traps retail buyers.

If we lose the Mar’24 support trendline, then the path of least resistance is down. A retest of the 116.45 level would be in the works.

Since DELL just had earnings, I figured it would be a good opportunity to initiate coverage on this stock. Given DELL’s post-earnings dump, and the observation that it has just started a consolidation phase, I am initiating coverage on it with a HOLD sentiment. While the overall technical setup still shows higher highs and higher lows, we have not seen signs of a technical bottom just yet.

Sentiment: HOLD (New)

Summary (with Price Targets - NFA):

• Higher highs and lows setup that is likely to come back into support between 128-129 before filling the 144.80-165.11 gap and retesting ATHs at 185.74, provided that the Mar’24 support trendline holds

• If the Mar’24 support trendline breaks, then DELL is likely to come back into 116.45 to retest the bullish island gap support (and lower)

• Given the relative weakness in DELL post-earnings, investors should be cautious of the “3-day” (or more) period of selling and wait for a bullish divergence to form on the 4h chart before adding more shares or initiating a new long position

All right, that’s all for this newsletter. Till next time!

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