Most days I get a number of emails from subscribers. This Friday is no different with one subscriber writing, "I am a Real Money subscriber and follow your columns daily and follow you on Twitter. Your analysis has added a lot of value. You had done an analysis on Dropbox (DBX) when it was trading in the mid 20s and it's been quite spot on. Could you please do a follow up on where it stands now if it's not asking too much. Thanks."
Let's check the charts once again.
In our last review of DBX back on February 18 we wrote that "I would expect DBX to eventually break out on the upside with a weekly close above $26. Traders could do some 'nibbling' or light buying at current levels risking below $21 for now. Buyers could get more aggressive on a close above $26. The $38 area is our price objective for now."
In this updated daily bar chart of DBX, below, we can see that prices did not reach our $21 sell stop and subsequently broke out on the upside in March when it closed above $26. DBX is trading above the rising 50-day moving average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line shows a bullish rise from early March which tells us that buyers of DBX have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is rising and above the zero line.
In this weekly Japanese candlestick chart of DBX, below, we can see a bullish picture. I do not see any of the common top reversal patterns. Prices are trading above the rising 40-week moving average line.
The weekly OBV line is strong and pointed higher. The MACD oscillator is bullish too.
In this daily Point and Figure chart of DBX, below, we can see a $35 price target.
In this weekly Point and Figure chart of DBX, below, we can see a $40 price target.
Bottom line strategy: Traders who are long DBX should continue to hold. Raise stops to $29.50 and our updated price targets are $35 and then $40.
