Dell Technologies has entered a positive phase after finishing a three-leg correction and breaking free from a downward trend. The weekly chart shows a strong Elliott Wave pattern, suggesting a long-term upward movement.
The stock completed major wave III and then went through a wave IV correction, which is represented by a double three pattern within the channel. This correction found support within a key zone (the blue box) between $71.42 and $45.61, an important area for reversals.
The rebound from this support zone indicates the end of wave IV and the start of a new five-wave sequence in wave V. Currently, Dell is approaching the end of wave ((1)), with a final push expected after a wave ((2)) pullback. As long as the price stays above $66.34, the bullish outlook remains strong.
The completion of a three-leg correction, following the red channel, and breaking out from the blue box suggests that a new upward cycle has started.
It looks like Dell has finished a major corrective phase, identified as wave IV. This phase reached a low within a key Fibonacci support area between $71.42 and $45.61. The sharp rebound from here signals that a new bullish movement, wave V, is now in progress for the stock.
In the upcoming weeks, we expect a short-term pullback as the initial rally, wave ((1)), is likely wrapping up. This anticipated dip, called wave ((2)), will offer a better entry point for new bullish positions. Traders should exercise patience, as buying at the peak of this first move is not ideal.
This technical view is supported by strong fundamentals, especially after Dell’s recent earnings report in September 2025 showed a 32% year-over-year increase in AI server shipments. Market sentiment is also positive, as options data from last week indicated a significant rise in call buying for January 2026 expiration dates. These signs point to institutional investors preparing for higher prices.
Given the expected dip, selling cash-secured puts with strike prices around $75 could be a good way to earn premiums while waiting for a better entry. Alternatively, traders can wait for the pullback to stabilize before purchasing call options for March 2026 or later. This timing allows enough space for the larger wave V to unfold without facing significant time decay.
It’s essential to keep in mind the stock’s volatile downward trend throughout most of 2025, which formed this entire corrective pattern after the strong rally in 2024. All bullish strategies should regard the $66.34 price as a critical stop-loss point. A sustained drop below this level would suggest that the wave IV correction is not finished yet.
here to set up a live account on VT Markets now
