Denver, CO, 08/21/2013 (Avauncer.com) – Dicks Sporting Goods Inc (NYSE:DKS) (Closed: $46.64, Down: 7.81%) dropped dead in the opening moments itself on Tuesday and never really came alive even in the rest of the session. The unexpectedly bad quarterly result was not taken kindly by the market as it punished it by selling more and more. It settled at the lows with a volume of 8 million against an average volume of 1.5 million only.
The rally from 2002 to 2013 is clearly divided into 3 legs. The first leg was in the period of 2002 to 2007 when it reached a high of $36.77 from the low of $3. The second leg was the massive correction that took the price to a low of $12.58 from $36.77 in just 13 months in the bear market of 2007 – 2008. The third & last leg till now is the rally from that 2008 bottom of $12.58 which has reached a high of $54.24 in September 2012. It actually created a Double Top at that level when it made a high at $54.25 in May 2013. The price action since June 2012 created a range with the upper boundary at $54.25 and the lower boundary at 44.06. The 2011 top of $42.97 is also very close to this level. The fall of the last session may take the price to this zone of $42.97 – $44.06 in the coming days. The rally will be taken as finished if and when this zone fails to hold.
A major trendline is supporting the entire rally from the 2009 bottom of $10.26. The price can expect to find some support from this which currently stands at $45 levels. The indicators are all bearish. The real danger for the bulls though comes from the Bollinger Bandwidth, which is signalling a trending one way move to come soon. Investors can attempt longs only if the zone of $43 – $45 provides support.
