September Technical Analysis – DRN

As mentioned here, I decided to put my September technical analysis of DRN on hold for a week. You never know what you’re going to get from a day of Fed meetings, let alone 2!

First, let’s revisit my August technical analysis for DRN:

DRN sits $30/share below its price at July’s option expiration date (almost 40%). The August downtrend is pretty steep, so I would expect some moderation over the next few weeks as DRN tests the near term high around $55/share and a near term low around $36.

Now, take a look at the chart I planned to use last weekend.
DRN price action indicates near term support

From a simple moving average perspective, DRN was back above the 20 day, but still below the 50 and 200 day. DRN didn’t test the August low. Instead, the ETF continued to test the $55/share mark.

Since initiating my August covered calls expired, DRN has experienced 4 bullish and 3 bearish technical events according to my brokerages technical analysis software. And the Commodity Channel Index says DRN just oversold (versus greatly oversold).

I assumed DRN would break through the $55 or the $36 floor “soon”. The catalyst for either move being Fed action/inaction.

Here is the DRN chart as it stands today.
DRN ETF price action indicates near term, mid-term, and long term weakness

We didn’t pierced the $36 floor last week. Unfortunately, I don’t see much support above the $30 level. We’ll have to wait and see what Monday/Tuesday have in store for us.

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About T. Knight
Blogging about my journey to financial independence via investing for cashflow.

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