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DSW (Friday’s close $27.41) declined from $39.58 to $21.23 (A-B), had a recovery rally to $29.53 (C) followed by another decline to $18.51 (D).

Subsequently, it settled in a bullish technical base known as an Inverse Head-and-Shoulder formation (dashed lines). DSW rose above the top of this pattern (E) to signal the breakout, renewed investor interest, and the start of a new up-trend (solid line).

The stock then pulled back to its 40-week Moving Average (40wMA) where it appears to have found support (F); only a sustained decline below ±$25 would be negative.

A sustained rise above ±$30 would suggest the resumption of the up-trend.

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Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled.

Chart source: www.decisionplus.com

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