Dell Technologies Inc. (DVMT) looks like it's ready to reverse direction.
Let's take a look at why.
In the DVMT chart, below, you can see the stock made a significant run up in price from the beginning of May of this year through September.
Through most of that time period, the stock consistently bounced off of its uptrend line. However, in early August, that line was violated, although price did manage to go higher for a few weeks.
In early October, selling pressure entered, resulting in price breaking below initial support at the $94.00 level. The stock bounced but a few sessions later, pressure reappeared with another break, this time below $92.00 high volume support that theoretically would convert to resistance. Thus, we have a series of lower highs and lower lows.
After testing the $86.00 level that should now function as initial support, DVMT has bounced to what we view as initial resistance at $92.50 as well as its new short-term downtrend line. Secondary resistance is just above $94.00. Should $86.00 initial support fail, secondary support is around $81.00, in our view.
Given the size of the overhanging resistance volume, the break of the prior uptrend, violations of support and new downtrend line, we believe DVMT has formed a "bearish reversal pattern."
A close above $95.00 would violate the pattern.