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Actionable news in DD: E.I. DUPONT DE NEMOURS AND COMPANY,

DuPont (DD) Stock Reversal Play: Trim Your Position

NEW YORK (TheStreet) -- On October 5 we wrote a bullish story on DuPont (DD - Get Report) , and before the ink was dry, the stock took off in reaction to CEO Ellen Kullman stepping down. We only looked at the technical setup on the chart and had no advance information. Luck -- sometimes you just step in.

In the chart above, we show a Japanese candlestick chart of DD. The latest entry is a potential doji pattern. A doji is a session where the open and the close are the same or nearly the same. This indicates a balance between bulls and bears. Candlestick charts excel at spotting reversals. There are three elements to the proper application of candlesticks. First is the right location. You need something to reverse, and for DD, we have a strong rally preceding the doji. The second element is the right pattern. The third element would be confirmation on the next session. A bearish candle session on Friday would tip the balance to the bears.

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This chart of DD above doesn't show anything really wrong with the rally. The On-Balance-Volume line is rising with the...


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