DGLY indecision, Descending triangle + Failing wedgeDGLY is currently in a down trend that made it fill the Sept 2nd gap.
It currently has 2 major opposing patterns.
RED: Descending triangle, continuation down trend pattern, not confirmed. Must break RED C-D for confirmation. Target is 3,63$. It also corresponds to August support line.
PURPLE: Failing wedge, reversal pattern, not confirmed. Must break PURPLE C-D for confirmation. Target is 33,64$ if confirmed, This target corresponds approximately to 1 year high.
I have a bias opinion towards the short option in RED. I do not believe that DGLY is likely to return to its 1 year high that quickly.
On the other hand, profit taking has been going on for the last two weeks on descending volumes. Investors that bought too high are now ready to leave and take their loss.
Waiting a bit longer to see which prediction will take effect.
DGLY trade ideas
$DGLY bouncingTaking a look at this weekly chart you can see the bigger picture. This is a classic bounce (hopefully; don't want to catch the falling knife). Looks like $DGLY will retest 0.382 Fib Retrace, which is a pretty standard entry / re entry area. I do believe $DGLY will be back in the Teens in no time - due to the MA's crossing, the 100-day starting to straighten out then curl upwards. As well as the outlook that the Company will continue to build, market, sell and profit on their products as well as refine and upgrade them while maintaining and getting new contracts well into 2014. Could have had a better entry point on this but, I'm not worried. Not a RIA. Make you own luck.