Dell Inc. (DELL) is set to test several key technical patterns in the next few days. A head and shoulders pattern on the daily chart, which has been forming since early June, already looks to be breaking lower.
As you can see on the chart below, it has also broken through support at the 50-day moving average (MA).
Additionally, a test of the highs in May (right at the beginning and end of the month) around the same level as the 50-day MA provides a third level of support.
Breaking both of these key levels and a fulfillment of the head and shoulders pattern would point to lower prices ahead for the computer maker.
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By Tim Bourquin, Trading Content Director, MoneyShow.com
