SIA Charts’ Relative Strength rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing.
In today’s edition of the Daily Stock Report, we are going to examine DoorDash Inc. (DASH). Food delivery service, DoorDash, joined the SIA S&P 500 Index Report in March of this year in the green favored zone. However, it has been in the SIA Russell 1000 Index since early 2022. The shares entered the favored zone in this report on August 5, 2024, at a price of $121.30 and have remained in the favored zone ever since. Today, the shares are at $244.10 which represents a doubling in price in a little over a year’s time. This exemplifies the power of the SIA Algorithm for always looking for names in the green favored zone as this is where the money flows are positioning towards. Currently, DoorDash sits in the 73rd spot out of 1008 in the Russell 1000 Index report.
Let’s take a look at the candlestick chart so see what lies ahead for the name after such a massive move in the past year. The shares went public in late 2020 and in typical nature, many IPO’s have an initial runup as “euphoria” sets in, pushing the shares in the $220.00 range all the way up to the $250 area where you see the bearish Gravestone Doji candle appear back in early 2021. Finally, reality settled in, and the shares digested the initial moves and drifted back down to the $130.00 level in May of 2021. Another sharp rally ensued from May 2021 to late 2021, where the shares once again touched $250.00 before decisively transitioning into distribution phase. The downtrend materialized from that point forward through until Oct 2022, before bottoming in the $40.00 level. From this point, the trend reversed, and the shares moved into accumulation phase with predominantly a steady pattern of higher highs and higher lows, which remains intact today. Most recently the shares reached new all-time highs trading above the $250.00 area all the way to the $280.00 level before the shares “petered” out with another bearish doji appearing - indicating the bulls may be getting exhausted. The shares currently are digesting their massive move and potential support may be found around the $220.00 level.
In looking at the Point and Figure chart on a 2% scale, to identify more precise support and resistance levels after such a large move, we see that the shares did reach all-time highs when the shares touched $270.67, surpassing the prior resistance level of $245.15 which the shares achieved back in its early infancy in late 2021. The bulls look to be exhausted and have now paused to digest the large gains with DoorDash materializing a downward column of O’s lasting 5 boxes so far. Based on an approximately 50% retracement, we may see some support at around $235.63, and below that, the previous high at $209.23. Resistance is at the recent all-time high of $276.08. Based on these levels, the shares are approaching a fairly reasonable risk reward profile as upside and downside targets look equally balanced currently should the shares hold these support levels. With a SMAX score of 8 out of 10, DASH is still exhibiting short term strength against the asset classes.
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