DELL US - Do Nothing - Trading Sideways At The Highs

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Read our full disclaimer, here.

Analysis by Alex King for Cestrian Capital Research, Inc.

Summary

Dell the company has been and will in my view continue to be a huge beneficiary of the wave of capex rolling through server-side and client-side systems and software. DELL the stock has benefited generously already and is putting in what may well be a ‘distribution’ pattern - sideways, rangebound action after a big move up is often a sign of institutional selling, slowly-slowly style so as to not spook the civilians. Of course any stock can moon at any time but a prudent investor would, I think, sit back to see what happens with Dell; a long position here seems heroic in nature and a short position opened after a correction and initial bounce in tech seems no less bold. So, we rate the name at Do Nothing based on this chart (note, it’s a log scale chart and it still looks like a huge run up - that’s how huge the run up has been!). You can open a full page version, here.

Now let’s dig in a little bit.