WHAT THE CHARTS SAY BY MONICA RIZK AND RON MEISELS
Bullish on DSW Inc.
DSW Inc. (Friday’s close US$27.41) declined from $39.58 to $21.23 (A-B), had a recovery rally to $29.53 (C) followed by another decline to $18.51 (D). Subsequently, it settled in a bullish technical base known as an inverse headand-shoulder formation (dashed lines). DSW rose above the top of this pattern (E) to signal the breakout, renewed investor interest and the start of a new up-trend (solid line).
The stock then pulled back to its 40-week moving average (40wMA) where it appears to have found support (F); only a sustained decline below ±$25 would be negative.
A sustained rise above ±$30 would suggest the resumption of the up-trend.
Monica Rizk is the senior technical analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled. Chart source: www.decisionplus.com