Dreams Inc.: A Chart View
Finding stocks under $5 that have potential isn't all that easy. Usually the stocks are under $5 for a reason. Today I present one that rather than having turnaround potential is instead already on a momentum move. The name is
Dreams Inc.
(DRJ)
.
Dreams manufactures, distributes and sells sports licensed products, memorabilia, and acrylic display cases throughout the United States. As a kicker, it also engages in the business of athlete representation and corporate marketing of individual athletes. From the press I read, it appears Dreams' online presence is doing well too.
Here's a monthly chart. On this time frame you can get a feel for both the strength and future potential.
The trend is confirmed bullish here and on all the time frames. Resistance is the 2007 highs. A move over that level doesn't find resistance until the all-time highs are reached which is just over $13. There's still a lot of potential.
On the weekly chart, the condensed nature of the long-term chart is unfolded and you can see the numerous signs of strength -- high volume bars with wide price spread.
That is larger-money folks coming in and taking a stake. That is good.
Drilling down to the daily chart to see where an entry point might be obtained, there are two areas of support in which you can get a position started.
Since I almost exclusively buy retraces, I would have a hard time starting a position as price is running higher, but would instead be patient and try to tap into this stock as it pulls back on natural retraces.
Dreams continues to have impressive charts even after a double. I would think some sort of further basing is in store much like what was seen in the October to mid-November time frame. I will look to use that consolidation ebb and flow to pick up some more shares. That's the trend and that's the place to add or start new positions.
Until next time, just keep trading the charts!
At the time of publication, Little was long DRJ, though positions can change at any time.
L.A. Little, author, professional trader and money manager, writes daily on
www.tatoday.com
, a free educational site for traders and investors. He has been featured in numerous publications and is the author of
.
His background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, L.A. espouses a simplistic technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and the qualification of trends, L.A. provides a breath of fresh air to an otherwise crowded room of derivative indicators with the emphasis on technical minutiae.