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A return of 12.6% in two days and…

Posted: 04/29/2013 - 11:06 am

The last two days have definitely been happy for those who followed our advice on Drake & Scull (DSI). Our trade is up 12.6% in two trading days and you “gotta” love the momentum in the stock (read: A 3% return in one day and…).

Those of you who are in tune with market street talks know that there are some rumors as to why DSI is rallying – rumor is DSI may be acquired by???. True or not, we only heard the rumor after recommending an entry so it was clearly not the reason we advise buying the stock. Should the rumor prove to be true, it will simply validate our methodology of using the price action as the ultimate source of information and the summary of all known/unknown variables.

Back to DSI…The stock remains in high power mode and anyone who argues that there is a level where resistance can be found probably fails to realize that levels are far less significant when dealing with momentum moves.

So here is what we are looking for in an exit…we are waiting for the stock to tell us that buying power is exhausted and that new highs are becoming difficult to establish. When that happens, we will be looking for an exit. In the meantime, our advice is to hold with a new protective stop at 0.90.

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One Response to “A return of 12.6% in two days and…”

  1. ayass1
    29. April 2013 at 11:56

    what about the momentum on DIC after breaking the 0.98/1.00 resistance range earlier this month & hiting 1.25 today, a level not seen since late 2009

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