DNL has been one of the most impressive stocks over the past year. Growing 160% if you bought at the reversal from December 2014 and help you stocks until today.
Is the stock still in an uptrend for both the short, mid, and long term? Yes it is! Could it still go up? Yes it could! However for those who bought and positioned earlier this may be a good time to consider that the stock is at its excessive phase. There are three phases in an uptrend:
1. Accumulation – which happened when from Dec 2013 to August 2014
2. Participation – August 2014 to November 2014
3. Excess – November 2014 to present
During an excessive phase people become too optimistic and just buy at prices thinking that the stock would not go down. However it comes to a point when majority of the market starts selling and taking profits or where majority of the investors think the stock is too expensive already that is when a fall or a correction may happen. After an excessive uptrend a correction occurs which allow people to take profits and also allows new investors to come in and buy the stock at a cheaper price.
Stocks do not go up forever, no one can defy gravity in a consistent basis.
If the stock does correct, will it still go back up again? Certainly, DNL is a good company and it will come to a point where people think the stock is “cheap” again. When more people start buying that would bring the stock price back up again.
I hope this article helps you in your trading and investing. My heart is to see you become more profitbale over the long term so that the stock market can help you reach your goals of financial freedom. Have a great weekend ahead and God bless you richly!
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- November 22nd Winning Strategies for Investing Singapore
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- November 27th Modern Technical Analysis: Chart Patterns and Oscillators
- November 28th Stock Smarts Davao – Basics, Fundamentals, and Technicals
- December 5th Stock Smarts Singapore 2014 (Basic) – Day 1
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- December 13th Market Outlook and the Top 10 Stocks for 2015!
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*pictures via google search
*charts via chartnexus
*DNL photo credit: Rappler.com