DE
is one of my larger positions and a company that I plan to hold in my portfolio for a long time. We are late into the overall economic business cycle and DE has guided lower on future earnings. Looking at a log view of DE from its 1968 IPO we can see a familiar trend. DE breaks out to a new high, climbing between 75-150% in the span of 2-3 years. Within 3-4 years of the breakout, price falls rapidly and back to its starting point, consolidates for 2-3 years, and then continues to a new high. This seems to happen late in the business cycle, close to recessions. We are currently in the longest expansion period for DE. This has happened 6 times in DE's history.
Zooming out again, we can take a look a the VWAP anchored to DE's initial listing.
DE revisited this AVWAP a number of times leading up to 1993. The last time that it was tested was during the 2009 recession. Anchoring a new VWAP onto the 2009 retest, and then anchoring additional the last times that those are tested starts to give a sense for some worst case scenarios for critical support.
Using a series of Fibonacci retraces and extensions throughout the time series identifies some key support and resistance areas among the most current price trend, as well as some very broad areas below. Note the visible range volume profile showing a very large air gap between 180 and 325.
We have fallen through the most recent AVWAP that has history with the AVWAP from IPO. The next is starting to drift into the support area below, with another entering the one in the 180-245 range.
Additionally, taking a measured range of the two most recent times that the detrend price oscillator peaked and fell below 0, accompanied by the price momentum oscillator rolling over gives us a projection for a scenario that could see price consolidate toward 320. Coincidentally, the measured range lines up with a Fibonacci time zone that has aligned to price pivots (including the most recent).