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Charts and Metastock: |
The breakway gap was made when the company raised guidance for the full year 2005:
Distributed Energy Raises Guidance for 2005
As you can see in the chart below, DESC jumped above a resistance level without touching it, which is the definition of a breakaway gap (those that are never closed 
):
Energy has been the hot sector of the year, and that's a wave that lifts all boats (what is the correct expression? thanks), specially the ones with improving fundamentals as DESC.
The stock doesn't look like it wants to close the gap, it looks like it is running away from this area. This is one of my preferred chart patterns, since risk is low (you don't want to see the stock start coming down to fill the gap) and potential profit is high:
I've decided to buy DESC for the 3 Stocks on Fire Portfolio at today's open.
3 Stocks on Fire Community take on DESC
This analysis is part of Top 5 Stocks for Tuesday, conducted by David Randolph from 3 Stocks on Fire. David Randolph is managing a public and diversified portfolio which is up 144% since May 2005.
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