Skip to main content

Dell: a '90s market leader digests its prior gains

Happened to glance at the daily chart of DELL today. 

While I wouldn't be surprised if the stock caught a bit of a bounce into 2013 (once year-end tax loss selling is exhausted), I'm not exactly bullish on the longer-term picture for DELL. 

Here's why, from a purely technical (price) view. Backing up to the weekly chart, we see DELL approaching its early 2009 lows near the $7.85 - $9 levels. If it can hold above those lows and rebound higher after a dismal 2012, that would provide a cyclical respite from what has been an overall bearish trend since early 2000.  However, even a months-long rebound and a 50%-60% rise wouldn't negate the longer-term bearish trend. 




Zooming out to the monthly chart, we see the secular bullish trend that took DELL from an adjusted price of $0.09 in 1990 to a high of over $50 (a 600-fold increase) by the bull market peak of early 2000. 


During this nearly-unprecedented boom, DELL was a market leader among US stocks. The company reached a peak market cap. of $100 billion in March 2000 and its stock gained over 60,000 percent in the 10 years prior. 

After the dot-com bubble crashed in 2000-2001, the stock made a valiant effort to regain its old highs, climbing back to the low $40s in the bull move of 2004-2005. It was not enough, as the secular bear trend and an ever-changing tech environment continue to take their toll on DELL.  We can see the ensuing decline on the monthly chart above.

When I look at DELL's 23-year chart, I see a fallen leader slowly digesting the monster gains of a secular bull move. In fact, it reminds me of a python digesting a very large meal - lots of time and rest are required to complete the process. 

If you are squeamish, please don't click the python link. Nature, like the markets, can appear to be very cruel at times.

Popular posts from this blog

Moneyball: How the Red Sox Win Championships

Welcome, readers . T o get the first look at brand new posts (like the following piece) and to receive our exclusive email list updates, please subscribe to the Finance Trends Newsletter .   The Boston Red Sox won their fourth World Series title of t he 21st century this we ek. Having won their first Se ries in 86 years back in 200 4, the last decade-plus has marked a very strong return to form for one of baseball's oldest big league clubs. So how did they do it? Quick background: in late 2002, team own er and hedge fund manager, John W. Henry (with his partners ) bought the Boston Red Sox and its historic Fenway Park for a reported sum of $ 695 million. Henry and Co. quickly set out to find their ideal General Manager (GM) to help turn around their newly acquired, ailing ship. This brings us to one of my fav orite scenes from the 2011 film , Moneyball , in which John W. Henry (played by Ar liss Howard) attempts to woo Oakland A's GM Billy Beane (Brad Pi

William O'Neil Interview: How to Buy Winning Stocks

Investor's B usiness Daily founder and veteran stock trader, William O'Neil share d his trading methods and insights on buying winning stocks in an in-depth IBD radio interview. Here are some highlights from William O'Neil's interview with IBD: William O'Neil's interest in the stock market began when he started working as a young adult.  "I say many times that I didn't get that much out of college. I didn't have much interest in the stock market until I graduated from college. When I got married, I had to look out into the future and get more serious. The investment world had some appeal and that's when I started studying it. I became a stock broker after I got out of the Air Force."    He moved to Los Angeles and started work in a stock broker's office with twenty other guys. When their phone leads from ads didn't pan out, O'Neil would take the leads and drive down to visit the prospective customers in person.

New! Finance Trends now at FinanceTrendsLetter.com

Update for our readers: Finance Trends has a new URL!  Please bookmark our new web address at Financetrendsletter.com Readers sticking with RSS updates should point your feed readers to our new Finance Trends feedburner .   Thank you to all of our loyal readers who have been with us since the early days. Exciting stuff to come in the weeks ahead! As a quick reminder, you can subscribe to our free email list to receive the Finance Trends Newsletter . You'll receive email updates about once every 4-8 weeks (about 2-3 times per quarter).  Stay up to date with our real-time insights and updates on Twitter .