DXC Technology Co. ( DXC) is scheduled to report their latest quarterly numbers after the close of trading Wednesday. In my December 21 review of the charts of DXC I wrote that, "Sometimes I like to imagine how prices may move. Right now I am imagining DXC declining to the $24 area and holding. This could look like a lopsided double-bottom pattern. Traders at that point could probe the long side, risking below $22."
Let's check the position of the charts and indicators again as prices did not dip to our suggested buy zone.
In the updated daily bar chart of DXC, below, I can see that rallies in the shares have encountered selling (resistance) at the intersection of the downward sloping 200-day moving average line.
The trading volume has declined the past three months and the On-Balance-Volume (OBV) line shows a weakening pattern. The Moving Average Convergence Divergence (MACD) oscillator is only slightly positive.
In the weekly Japanese candlestick chart of DXC, below, I see a "touch and go" pattern. Prices are up from their September nadir but have been unable to breakout over the 40-week moving average line.
The weekly OBV line has weakened the past four months. The MACD oscillator is below the zero line.
In this daily Point and Figure chart of DXC, below, I can see a nearby downside price target in the $27 area.
In this weekly Point and Figure chart of DXC, below, I can see a potential downside price target in the $22 area.
Bottom-line strategy: I have no special knowledge of what DXC will report Wednesday evening but traders could look to probe the long side of DXC around $23 (instead of $24) and then risk to $21.
