Diamond Cluster International (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 1-year chart
DTPI 1-year chart

Sell short

DTPI 2-month chart DTPI 2-month chart

Diamond hit a new peak in February and emerged relatively unscathed from the market turbulence at the end of February. A mid-March announcement lowering guidance for the quarter, however, drove DTPI down almost to the 200-day moving average, breaking through the trend line and the 50-day moving average. Since then it has languished and continued to decline steadily.

  • Price momentum (PPO) — slowed dramatically
  • Trend (ADX) — strengthening, with selling pressure (-DI) above buying pressure (+DI) and rising
  • Relative strength (RSI) — weak and essentially flat
  • Volume — average is being held up by enormous volume of sell-off

Based on technical analysis, MarketEdge calls DTPI a "short candidate" in a "strong downward trend."

Buy to cover

loss Bottom line
-5%

Whereas I saw a stock beaten-down and battered, others in The Market apparently saw a buying opportunity. Since I shorted DTPI, the chart has strengthened enough to make me doubt the wisdom of holding onto the position. After I did so the price fell to close down 1%, so I may have abandoned the position prematurely. Oh well.