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Buy Dell at Critical Support

by Sam Collins 10/15/09

Dell (DELL) -- This maker of desktop PCs, workstations and notebook computers, fell from more than $40 in December 2004 to less than $8 in late February of this year.

DELL Chart

Chart Legend

But following a two-month consolidation, DELL broke to the upside. Since then, it has been trading in a narrow bull channel, not unlike the major indices.

Now, however, unlike the indices, DELL is sitting on its bullish support line and 50-day moving average. DELL should be bought at this critical support with stops at $15.

The stock should continue to trade within the bull channel, so the next top could be around $18, but the longer-term target is $25 to $26.

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