Chart of the Week - DMC Holdings, Inc.

Short-term Traders/Tsupiteros:	Medium-term/Position Traders:
Support - 15.00	Support - 10.00 to 10.50
Resistance - 17.50 to 17.75	Resistance - 23.00 to 25.00
Trend - Up	Trend - Up
Recommendation - Hold	Recommendation - Hold

DMC Holdings, Inc. (DMC) has been one of the strongest stocks in the whole market in the last nine weeks. From a low of 8.50, the stock has almost doubled in price in just nine weeks' time. Is it still wise to buy this stock at current levels, or, is it time to take some money off the table?

Obviously, the stock is trending up in all of its time-frames. It is trending up in the long-term, in the medium-term and in the short-term. So, does this mean that the stock is a "buy the dips"? While the stock is certainly trending up, it has been trending up for quite some time already. I think the more appropriate question is, is it time to take profits or just hold?

I don't know if you noticed it but I used a linear price scale in the monthly chart of DMC above and I used a semi-logarithmic price scale in the weekly chart above. Thus, the weekly chart now has a higher resistance level than the monthly chart. Normally, the higher time-frame would have a higher target than the smaller time-frame. Why did I do this? If I used a semi-logarithmic price scale in the monthly chart of DMC, I would have an unrealistic target of 100.00 for DMC. Secondly, because the uptrend of DMC on the weekly chart has gone off the charts, a linear price scale has become useless because its resistance line is way below already. Thus, a linear price scale in the monthly chart would have a lower price target, and, a semi-logarithmic price scale in the weekly chart would have a higher price target. Just wanted to clarify that before I begin my analysis.

If you compare the monthly chart and weekly chart of DMC above, the monthly chart has resistances at the 17.75 level only while the weekly chart has its resistances at 23.00. Furthermore, the daily chart is pointing to 17.50 as its next strong resistance. Which one do we follow? Since the monthly chart and the daily chart is pointing to the almost the same numbers, should we follow that? I think the more appropriate answer is, you should follow none and simply assume that the stock will continue to trend up as long as its support levels holds. When stocks are trending this strong, it is almost impossible to say when the trend will end. Of course, at some point, the trend will end, and, I am not discounting the possibility that the trend may even end now, however, I also am not discounting the possibility that the trend may end one month from now.

Personally, I would not recommend buying DMC anymore at current levels. In my opinion, there are just so many stocks that haven't gone up yet and have yet to make the big move that DMC has done already. So, why buy DMC at all right now? However, if you are currently holding it, you have two options: you can either just hold and use a break below the 15.00 level as your mental stop; or, start taking profits on strength. May take profits as close to 17.50 as possible? Just remember, if you take profits, I would not suggest that you buy it back higher anymore. If it continues to go up, you should have no regrets. On the other hand, if you don't want to try and guess the highs, you will be forced to sell when prices start to go down. It's ok to sell down if prices are still going to go to much higher levels, right? However, what if the stock starts to drop already by this coming week?

I would bow to anyone who bought this stock below 10.00 and is still holding it right now. The main reason why this stock has continued to go higher and higher is because most people sold too early and has simply ended up buying back higher. So, if you bought this stock at low levels, congratulations to you. But if you are someone who just bought this stock recently, I think you are now playing with fire. I wish you luck but, if I may suggest, I don't think you should be greedy anymore.

Short-term Traders/Tsupiteros vs. Medium-term/Position Traders: Recommendation for short-term traders or Tsupiteros are meant to be used by traders whose holding period are limited to one day to two weeks. Medium-term or position traders are meant to be used by traders whose holding period are two weeks to three months. Long-term investors whose holding period is more than three months should not follow these recommendations.