Returning to our series on (usually correct) arithmetic versus the more appropriate logarithmic scales for long-term timeframes where securities have appreciated rapidly, I want to draw a distinction between DMND in contrast to NFLX and GMCR. On its face, all three stocks look similar in that they were previous momentum darlings since 2009 that fell down along the other side of the mountain over the past year or so. Unlike NFLX and GMCR, which still indicate on the logarithmic scales for their respective monthly charts that more downside is a distinct possibility and that they are not so low that they simply cannot go lower, DMND‘s logarithmic scaled monthly paints a picture of last line of defense support coming into play.
In other words, unless Diamond Foods is going out of business anytime soon (unlikely with their strong and popular product lines), we are much more likely to see selling abate imminently here than with NFLX and GMCR.
For reference on chart scales, please see this post.
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… the problem with trying to trade a name like this (LONG) … and you talk about this frequently … is all of the “dead and wounded” at higher prices !
So much overhead resistance … any rally will be sold ! imo
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Excellent point, alf. I don’t disagree. I just believe further downside is capped from here.
I’m starting to like DMND down here but are you concerned with any of their debt ratios; or were you strictly looking at the technicals for this analysis? Thanks!
I believe that news has been out for there for a while and is baked in the cake.
Chess
Ban Corstein. It’s the same troll who has been pushing his moronic DMND short on my blog for weeks. He is a paid pumper.
mr.fly,i think i set it straight.
Done
i’ve held dmnd for sometime now,and just recently as of last tuesday decided enough is enough. they just stopped paying the 45 cent divy about 6 weeks ago, and i seem to think that the cooked books thang is way over done, in the sense that the price action,to what they bring in gross revenue from sales doesnt warrant the share price at all.look, ipsu was a 100yr.old plus company,they have de-listed..hhhmmmm.dmnd 100yr.old company,whose products are sold all over twirling down the drain? it seems,to me any way,that something,or someone,wants to see this company gone.sum ting wong.who cant see it?