DDS Watch

The retailer Dillard's Inc. (DDS) is showing bull phase on the parabolic sar after earnings were announced this morning. The price is up 12% over Thursday's close.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
DDS $28.73

At 11:21 a.m. Eastern

Normally I would avoid a stock that shows such a rise on news. I mean, the word is out. The joy is already in the price of the stock. Where's the chance for profit?

DDS is an exception, in my book, for these reasons:

• It has been in an uptrend since November 2008.
• The recent pullback recorded a higher low, keeping the uptrend intact.
• The stock is trading 8% below the swing high, providing a comfortable upside margin before the price hits serious resistance.
  

Today's rise put the price above the 20-day moving average. Were I to enter DDS as a directional trade in my own account, I would wait for a pullback before opening the position. Reversal Levels

• $31.22, +8.7%
• $28.68 <== You are here.


• $28.04, -2.4% (20-day moving average)


• $22.70, -21%

DDS was impacted by the May 6 software-driven mini-panic, so there is some doubt about the validity of signals, like the psar, that rely on intra-day extremes. However, the doubt is mainly on bear side. The panic should in fact make it harder to show a bull phase. Also, the macd, which only uses closing prices, is moving up toward the zero line, a bull sign.

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Skynet Panic of May 6 Panic Looks Like This Skynet Panic Poisons Technical Tools Abbreviations: psar - Parabolic Stop and Reverse adx - Average Directional Index pps - Person's Proprietary Signal ma20 - 20-day moving average macd - Moving Average Convergence-Divergence mfi - Money Flow Index sto - Fast Stochastic About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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