FRI 9/4: DSGX — Breaks Its 10 DMA With Volume — SELL SIGNAL

10:10 AM – Selling the last of my DSGX position here as shares break below the 10 DMA with a sharp increase in volume. The combination of a key support violation and heavy selling volume is a clear SELL SIGNAL under our rules, so I’m exiting the position completely.

James’ Trader’s Tip: Volume Confirms the Breakdown

  • A break below the 10 DMA is an important technical violation.

  • A sharp increase in volume makes the weakness more meaningful by confirming stronger selling pressure.

  • When price and volume turn bearish together, follow the rules and protect capital.

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Chart services courtesy of stockcharts.com. Annotations by James Taulman.

WED 9/2: DSGX — Following the Rules and Selling a Portion on Technical Weakness

10:56 PM – As much as I hate to sell this quickly, I couldn’t ignore today’s technical weakness in DSGX. Three bearish signs stood out: (1) shares were down about 2.4%, (2) price was dropping below the 10 DMA, and (3) volume was running above average.

That combination is enough technical weakness for me to follow the rules and reduce the position. I sold half at the close for a $192.45 loss, or -3.8%.

CORRECTION: The loss was incorrectly reported in the SMS as -$384.99. The correct realized loss on the half position sold was -$192.45.

 

James’ Trader’s Tip: Follow the Rules Even When You Don’t Want To

  • A break below the 10 DMA is an important technical violation under our rules.

  • Weak price action accompanied by above-average volume makes the deterioration more significant.

  • Selling a portion allows us to reduce risk while still giving the remaining position an opportunity to recover.

 

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Chart services courtesy of stockcharts.com. Annotations by James Taulman.

FRI 8/28: DSGX – BUYING (1/3) @ $81.38

3:40 PM – Starting a 1/3 position in this Computer Software-Specialty Enterprise company as shares shoot higher from near the 10 DMA and look to be closing at a new recent high above $81.00 with a solid increase in volume. The combination of support at the 10 DMA, a move to new recent highs, and increased volume gives me a technical BUY SIGNAL.

James’ Trader’s Tip: Strength Should Be Confirmed by Volume

  • An advance from near the 10 DMA shows that important short-term support is holding.

  • Moving into new recent highs demonstrates improving price strength.

  • Increased volume adds conviction by showing stronger demand behind the move.

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Chart services courtesy of stockcharts.com. Annotations by James Taulman.