Monday, October 8, 2007

20-Day Play: DAR

The 20-Day Play seeks to capture a stock that has consolidated momentum and is ready for another leg up. Specifically, the stock will have traded above the 20-day simple moving average for at least 20 days and will be set up to bounce from the average.

DAR certainly meets the basic screen necessary for the 20 Day Play. However, the RSI and MACD are both showing signs of possible weakness ahead. Be careful as more consolidation maybe required before DAR can continue moving up.

Also present is the almost symmetrical reverse head and shoulders pattern.

Overall, I find this stock worth watching to determine if the 20 day average will begin to offer support as it did in March, April, May, and June.

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