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Fan Yang

Designer Show Warehouse (DSW) - Bears Still in Control

A month ago in December 2018, I noted that $DSW was in a bearish breakout and was opening up a period of bearish correction.

Designer Shoe Warehouse (DSW) - Bearish Breakout

DSW Daily Chart

(click to enlarge)

- As we can see on the daily chart, price found support around $23, just above a previous resistance.
- This showed that bears were tentative in this market. It also coincided with the current recovery in the general equities market. 
- In the previous update, I noted that resistance around $25-$26 would be a signal for further downside. 
- So far price pushed above this resistance. BUT, we can see that the breach was relatively brief (2 sessions), before price fell back below $26.
- The RSI is also holding below 60, which is a sign that the prevailing bearish momentum is still intact.
- Essentially, the rally from $23 is not a convincing one.
- In the coming weeks, if price can close below $25, we could be looking at a continuation of the bearish correction. 
- So far, I don't see any reason to change the bearish expectation towards $20, and possibly the 2018 low around $18.
- At this point, a break above $29 would be a sign that the market is no longer in bearish correction mode, and is rather in a sideways or bullish market.

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