Wednesday, May 31, 2006

DRIV is Cracking

DRIV apears to be in the early stages of a breakdown. It closed below it's 50 dma for the first time in about 4 months yesterday then broke out of its recent range today. The RSI is confirming an end to the uptrend, CCI is decidedly bearish and the MACD is about to go under. There may be a few more days of stalling in the lower end of it's recent range before making the first major leg down. As you can see from the chart there is alot of room to fall with no major consolidations in the last run up. A good target is the 68% fib retracement which lies near a high volume move and the 200 dma around 36. DRIV is currently IBD's # 41, lets see how far it falls in next monday's paper.
By the way, I am out of AAPL completely after the breakdown today and yesterday. It failed to hold at the lower end of the symetrical triangle I mentioned before and apeared poised to break 60 (which it did) so I am out. There is a potential double bottom forming, but I am staying away from this one until it can show more strength and regain it's 200dma. If it breaks last month's low I could even go short.

7 comments:

junglejim said...

Way to go Pyth. I'll be checking you out regularly

junglejim said...

Where's the alien?

pythagoruz said...

Thanks jj, hopefully he will post this weekend on MOVI. He has crunched some numbers and sees big things for this company in the future. Its got a great chart too.

indigo-alien said...

Hey JJ, I'm around. Busy trading and making money.

One article coming up

pythagoruz said...

To update this post, DRIV made an effort to re-take it's 50 dma and failed. This would have been an ideal time to enter a short position. It ended last week with a bearish engulphing candlestick on above average volume and is decidedly pointed lower. I am more bearish on this stock than I was when I first posted about DRIV and have added to my put position since. It looks like DRIV is about to fall off a cliff and my guess it the general market is going to make it very easy.

pythagoruz said...

Also, I didn't get a chance to pick up this week's IBD monday special, but aparently DRIV has falled to #86. It was 41 in the IBD top 100 last week. I'm gonna go out on a limb here and predict it falls off the list completely next weekend.

pythagoruz said...

Falling like a rock.