A Dropbox Full of Cash: DBX Breaks to New Highs After Clearing Important Levels

June 18, 2018
/ By Scott Redler

Dropbox (DBX) hit a record high Monday morning at $43.50.

I sold my long into the strength, but let’s go back and reverse engineer the rally, level by level.

Last Wednesday, I said this in my Morning Note:

“DBX has had many false starts. We’ll see if this one is better. Bulls want it to continue above $31 and hold that level.”

That $31 level was Tuesday’s high, as you can see on this chart:

It managed to get above $31, touching $31.90. That made $34 - the IPO reaction high -- a big spot to watch.

Then I said:

DBX was on the stronger side again yesterday. It had a decent Day #1 Tuesday and cleared $31 yesterday. There’s a big base, and if it can clear $31.90, there could be a real move to the post-IPO highs near $34.83.

Now let’s look at the “After” chart:

As you can see, DBX cut thorough $31 like a knife through butter on Wednesday.

And on Thursday, it gapped above the descending trendline to pass the post-IPO highs near $34.83. As i write this, it’s over $36.

Then on Monday, DBX opened up green and power higher. I sold my position into the morning strength.

The stock hit a high of $43.50 - wow.

The lesson: keep an eye on post-IPO highs and lows. They are very important pivots for judging action, and sometimes signal follow-through because they create F.O.M.O. (Fear of Missing Out) for traders that worry about getting left behind.

P.S. For the first time ever, Scott’s teaching his unique method of game planning that could be your answer to trading frustration.

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A Dropbox Full of Cash: DBX Breaks to New Highs After Clearing Important Levels

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