DropBox Inc: My Position
Capital has been flowing into the tech sector since March of 2020. The only well known US tech company that I could find that wasn't hitting all time highs was 
DBX. Low price shouldn't be the only reason you buy shares of a company. There needs to be other factors that confirm your contrarian bias.
Fundamentally what I know about DropBox, is their valuation are extremely high. There is no true value here from an asset perspective, however, we have to remember tech stocks are disconnected from reality and investors are happy to pay a premium (this is not to say this can last forever. One fundamental thing I do like about DropBox is the tools they create. They are developing a business suite similar to Microsoft Office, rather than just being a cloud storage company, which is what has been their business model historically.
Technically, I'm seeing a capitulation wick in march, an establishment of a base, and a breakout of that base, along with a breakout of the 100 and 200 week moving averages. There can still be decent pullbacks as this move gains some steam, so it's important to find a good entry point. I made my initial entry at $22.25.
If this up move continues, my targets sit at $26, $35, and $40. This stock has potential to make new highs as investors search for where to park their capital. However, this all depends on how well the federal reserve does with liquidity. We are in an interesting economic situation.
I am closely watching $21 as support. If this is broken on the weekly chart, we are likely headed for $17.
I will assess the position week by week.
DBX. Low price shouldn't be the only reason you buy shares of a company. There needs to be other factors that confirm your contrarian bias.Fundamentally what I know about DropBox, is their valuation are extremely high. There is no true value here from an asset perspective, however, we have to remember tech stocks are disconnected from reality and investors are happy to pay a premium (this is not to say this can last forever. One fundamental thing I do like about DropBox is the tools they create. They are developing a business suite similar to Microsoft Office, rather than just being a cloud storage company, which is what has been their business model historically.
Technically, I'm seeing a capitulation wick in march, an establishment of a base, and a breakout of that base, along with a breakout of the 100 and 200 week moving averages. There can still be decent pullbacks as this move gains some steam, so it's important to find a good entry point. I made my initial entry at $22.25.
If this up move continues, my targets sit at $26, $35, and $40. This stock has potential to make new highs as investors search for where to park their capital. However, this all depends on how well the federal reserve does with liquidity. We are in an interesting economic situation.
I am closely watching $21 as support. If this is broken on the weekly chart, we are likely headed for $17.
I will assess the position week by week.
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