What you need to know
- Dell shares dropped 11% on Tuesday in extended trading after the maker of servers and PCs reported quarterly revenues that were below Wall Street’s expectations.
- A rising wedge is a chart formation that could indicate an upcoming reversal should the stock break below its lower trendline.
- Investors should watch key support levels on Dell's chart around $130, $105, and $87. Watch out for an important overhead region near $180.
Dell shares fell in Tuesday’s extended trading after the company reported that its fiscal 2025 third quarter revenue was below Wall Street estimates.
The company’s earnings conference call revealed that the revenue forecast for the first quarter was between $24-$25 billion. This is below the analysts’ expectation of $25.6billion. However, despite the record-breaking AI server sales in the last quarter, the company warned that its older personal computer and data storage businesses were experiencing apprehensive clients, a factor which may have impacted investor sentiment.
Dell shares declined 11%, to $125.75 after hours. Through the close of regular trading Tuesday, the stock had gained 85% since the start of the yea, significantly outperforming the S&P 500’s 26% return over the same period.
Here, we examine Dell’s technicals and highlight important price levels for investors to watch.
Risen Wedge Pattern
Dell’s shares, which bottomed out in August below the 200 day moving average, have been trending higher. This chart pattern may indicate a possible reversal if the lower trendline of the wedge is broken.
The relative strength (RSI), which indicates a positive trend in price with a value above 60, turned down ahead of earnings when the price fell under selling pressure at the top trendline of the wedge pattern.
We’ll use technical analysis to find three important support levels in the Dell chart. Also, we’ll point out a key overhead area that should be watched if this stock’s long-term upward trend continues.
Keep an eye on the Key Support Levels
Around $130 is the first area to watch. This level represents a place where investors can find buying opportunities along a trendline which connects several peaks and valleys in the chart. The rising 50-day MA may also provide support for this area.
If this area is broken, a drop to $105 could be imminent. This chart area could offer support at the pivotal low of March, which is closely aligned with price levels located just above early-September’s trough.
Continued selling may see shares return to support at $87. This level is near the minor twin peaks of February and the early August swing low. Investors could look for buy-and hold entry points.
The Important Area Above the Head to Monitor
It’s important to keep an eye on the $180 price level if Dell begins a longer-term trend of growth. Investors who bought Dell shares earlier could lock in their profits near the all-time high.
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According to the article, as of its date of publication, the author did not possess any of these securities.
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