DISH Stock: Bullish Tailwinds
DISH Network Corp (NASDAQ:DISH) stock continues to make new 52-week highs, and the price patterns on the stock chart are suggesting that higher prices are yet to come. In my previous report on DISH Network stock, I outlined the bullish developments that suggested that DISH stock had just resumed a bull market that began after the price bottomed following the financial crisis in 2009.
Bullish signals continue to mount, and the price action on the stock chart remains constructive. I have no doubts that DISH stock is still in a bull market that began in 2009. This bull market witnessed a nasty sell-off, and DISH stock lost 51.8% of its value. Such a decline is difficult to endure, but this was still in the context of a long-term bull market.
The following DISH Network stock chart illustrates the long-term trend and a new bullish development.
Chart courtesy of StockCharts.com
The bull market in DISH stock is defined by using an uptrend line. This line is created by connecting the troughs on the price chart, as illustrated above. The trend began in 2009 and is still intact. As long as DISH stock remains above this trend line, the bull market in DISH Network stock rages on, and I would look for bullish setups to trade upon.
The dreadful sell-off that investors experienced was actually constructive, as the price found support at the uptrend line and at a key Fibonacci retracement number. Fibonacci retracement numbers (highlighted in green) are a very popular tool used by many technical traders. This tool is used to identify countertrend price objectives.
In theory, when a stock pulls back from a primary trend, shares will retrace approximately 50% to 62% of the primary move. This zone, highlighted in the chart above as “The Box,” usually offers support, as traders will be eyeing this area as one in which to enter long positions or cover short positions.
The theory behind this retracement level is that the primary trend will reassert itself when the pullback is complete. It is not a coincidence that this level coincided with long-term support outlined by the uptrend line.
The lower panel labeled “MACD” is the moving average convergence/divergence, a simple and effective trend-following momentum indicator. Signal-line crossings are used to distinguish between bullish and bearish signals. This signal is currently crossing in a bullish manner and illustrates that a new bullish development has just manifested, indicating that the bears have lost complete momentum and the bulls are now in full control.
The following DISH Network stock chart illustrates that the price continues to behave constructively.
Chart courtesy of StockCharts.com
The DISH stock chart above is a perfect example of healthy bullish price action. Healthy price action consists of impulse waves that take the stock price higher, and consolidation waves, where the new higher prices are digested. Consolidation waves are essential in a healthy trend because they alleviate any overbought conditions that may have developed as the stock moved higher.
These consolidation waves are also essential as they set up the next impulse wave. The DISH Network stock chart above illustrates that a new consolidation has just completed and that a new impulse wave has begun to develop. A price surge can now be expected.
Ever since a golden cross was generated in August 2016, a bullish tailwind was created. A golden cross is a bullish signal that is produced when a faster 50-day moving average (highlighted in blue) crosses above a slower 200-day moving average (highlighted in red). When this signal is engaged, bullish patterns have a higher probability of succeeding.
Bottom Line on DISH Stock
I am bullish on DISH Network stock because the bullish signals continue to mount, suggesting that higher prices are yet to come. My view will remain bullish for as long as the DISH stock chart suggests holding this view.