Diamond Management and Technology Consultants (DTPI)

Company

"Diamond is a premier global management consulting firm that helps leading organizations develop and implement growth strategies, improve operations, and capitalize on technology. Mobilizing multidisciplinary teams from our highly skilled strategy, technology, and operations professionals worldwide, Diamond works collaboratively with clients, unleashing the power within their own organizations to achieve sustainable business advantage." (company website)

DTPI 3-month stock chart

Buy

Diamond made a new 52-week high in early January and yesterday the pull-back reached the lower Bollinger band. Today, the company announced very positive earnings and a rosy outlook. The stock jumped. I bought in just above the previous peak.

  • Price momentum (PPO) — had been slowing but getting a big boost from today's earnings
  • Trend (ADX) — had weakened after the peak but buying pressure (+DI) did not fall much below selling pressure (-DI) and is picking up again
  • Money flow (CMF) — very strong inflow
  • Relative strength (RSI) — neutral, pointing up
  • Volume — big volume on the new high and already reached normal volume today after less than 2 hours of trading

Based on technical analysis, MarketEdge calls DTPI a "buy" in a "strong upward trend."

Sell

gain Bottom line
9%

I decided to close my position in DTPI today, even though it is well above my stop. It moved up very smartly after my buy to set another 52-week high, but has lost steam rapidly since, visible in declining volumes and falling buying pressure (+DI). I could very well be wrong, but my guess is that DTPI will come back a bit before continuing upward. The uptrend is firmly in place, but it has jumped way out ahead of the 50-day moving average in just a short time, and the 200-day moving average doesn't even appear in the chart (below the range). It's always good to bank a profit.