Chart of the Day: DELL

0:00We're back up morning movers. Truist is taking up coverage on Dell, initiating the stock of the whole rating in a $170 price target. The firm says it's cautious around the legacy tech company's exposure to higher memory costs, and it's shrinking gross margins amid a shift to AI servers. Shares of Dell are up nearly 80% year over year up a little bit this morning as well. As we welcome in our next guest, we got Ben Watts and joining us. Ben, of course, a senior manager within Charles Schwab's trading and education services department. Ben, it's always a pleasure. Good morning to you. Let's talk some technicals. We're looking at Dell. One of the companies we've watched come from legacy tech as it was described in that analyst note to a big time AI winner. Yeah, and Alex, good morning. I'll tell you what, you know, that phrase that Dell used to use, dude, you're going to get a Dell. I think maybe now applies to some of these AI data centers

1:01because that certainly seems to be where that pivot is going, especially as they face additional challenges from what has perennially been one of their rivals Apple on the retail front. But in this short-term view, Alex, with this initiation of coverage, we're starting to see a little bit of a bounce. You mentioned, excuse me, you mentioned it that shares were up a little bit this morning and we're starting to see that, but they're doing it with a little bit of maybe lacking enthusiasm. So maybe it's kind of you're getting a Dell with a bit of a question there because that price is really hovering right around this 167 mark. You see that declining resistance. You see the divergence in the MACD from what price is doing in this range between 167 and 169, which truly is not a strong range trade-wise if you'll get that volume profile. There would seem to be perhaps a little bit of a magnet pulling this a bit higher here from a volume standpoint. So we'll see what happens on the longer-term basis

2:03when the cash market gets up and running. But this short-term chart gives us a bit of a bounce, but not a lot of enthusiasm to break out of that diagonal trend line here, Alex. All right, Ben, as we take a step back, I know you got a one-year look as well. How much does that picture change when you adjust the timeframe? This maybe makes it a little bit more enthusiastic, dude. You're getting the Dell because you get this longer-term chart. I mean, the 50-period moving average is up. This is trading well above its 200-period moving average, which is kind of traced out by that diagonal trend line there. And you've got that resistance at 167, which it broke through last week solidly. Now coming back, retesting that 167 and bleeding a little bit below. So for a long-term trend or breakout type trader, the question is, how much flexibility do you give it at that level of support before you call this a fake false breakout? Or do you look at this as kind of just finding a support level around there? It's got resistance overhead at the 185 mark. So the next couple of days become critical.

3:04You can also see a little bit of a bearish divergence hidden, though it is, in that RSI, as it breaks below a horizontal trend line there, Alex. Good stuff, Ben. And it goes to show there is still some names out there that are doing OK despite all the bearish headlines. We really appreciate it. Thanks to Ben Watson, of course, Senior Manager for Charles Schwab.