Following a powerful high-volume advance from late February into early this month, Data Communications Management Corp. (DCM:TSX; DCMDF:OTCQX) has been trading sideways in a relatively narrow range for about two weeks now.
Superficially, after such a big advance, it might be thought that a top is forming, but this pattern has all the attributes of a bull Flag — the persistent heavy volume on the steep advance has been followed by a marked dieback as it has traded sideways, the Accumulation line has held up well, and the trading range can be seen to be tracking within a slightly downsloping parallel trend channel, in other words, a bull Flag.
This implies that the pattern will soon resolve into another powerful upleg that could very well be as big as the first upleg. Note the large bullish "dragonfly doji" that occurred about five days into the Flag, whose intraday low so far marks the low for the pattern.
Data Communications Management is therefore rated an immediate strong speculative Buy, and a stop may be placed beneath the lower boundary of the Flag just in case this interpretation is proven incorrect.
Data Communications Management's website.
Data Communications Management Corp. closed for trading at CA$2.02, $1.48 at 3.30 pm EDT on March 21, 2022.
This article was originally published on March 21, 2023, at 3.40 pm EDT at clivemaund.com
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The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
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