DCBO

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Do you feel DCBO is getting closer to a neutral stance instead of bullish? It’s run up quite a bit since being added to the growth bull list. Or do you feel there’s still more growth potential?

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Asked on November 26, 2020 6:39 pm
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Hi there,

DCBO is definitely starting to get up there in price. We still believe there is potential upside (just like we do with LSPD), but investors will want to take a cautious approach at these levels. The company certainly isn't cheap and yesterday it did enter overbought territory with a 14-day RSI of 75. That isn't to say it can't continue it's run, but it is also a sign that it may be do for a short-term pullback.

The instinct with these high-growth stocks is to try and time your purchases. It usually doesn't work which is why we always recommend averaging into positions. In the case of DCBO and LSPD who have seen a big run up in prices, averaging in is even more important. It allows investors to benefit if the price keeps rising, or it limits the loss and enables averaging down if it drops. Remember, just because a stock looks expensive it doesn't mean it can't continue to grow and is a bad investment. Shopify proved this point time and time again.

At these levels however, it will come down to your comfort and risk level. There is no question that buying DCBO at today's price of $65.88 carries more short-term risk than at $50 per share. Long-term however, it has plenty of room to grow.

Mat

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Posted by Mathieu Litalien
Answered on November 27, 2020 4:30 am