PDI is one of those stocks that trends exceptionally well when it’s in the mood. It embarked on a substantial rally in April 2020, resulting in a gain of over 7000% (that’s not a misprint). Trends like that are never sustainable, which is why the large period of consolidation between January 2022 and February this year isn’t a reason for concern. It would have been extremely frustrating for holders during that period, but we are viewing it in a positive light. On the weekly chart (not shown), it’s not out of place. I will look at that timeframe during the video for clarity. Either way, the upper boundary of the congestion pattern has been overcome, setting the stage for the trend to continue. It would take a push beneath $0.28 in a move that sticks to move back to a neutral stance. We see that as a low probability scenario.A quick glance at this daily chart tells us that volume can be an issue with this company at times. Wide-ranging bars and gaps are common, which is the tell-tale sign. That said, it doesn’t detract from the bullish picture. It’s not a chart that lends itself well to using the Wave Theory, so I’m not going to force a count on it just for the sake of it. We are happy to use more conventional patterns. The first thing to note is that the old zone of resistance was penetrated with attitude in early February. A couple of breakaway gaps helped the breakout gain a head of steam. There has been some mild profit-taking over the past few weeks, yet it’s acceptable. In fact, it’s healthy, as straight-line moves open the door for a substantial snap-back reversal.Last month we highlighted a minor line of support, with price sitting on top of it. It hasn’t proved to be significant, but it has allowed another pattern to form. It comes in the form of the symmetrical triangle as annotated. The upper boundary was overcome today, which is another small step in the right direction. The ideal situation is to push up through the recent pivot high at $0.40 with conviction. That area has seen some profit-taking over the past few weeks, but we aren’t viewing it as being anything other than mild resistance.Trading StrategyAs we can see on this chart, substantial moves occur regularly, both up and down. The problem with companies with that trait is that you have to use wide stops. Otherwise, you open yourself up to getting whipsawed out of positions. It’s extremely frustrating and is the reason I’m not going to make a formal recommendation. However, if you still want to be involved, you could buy following a push above the recent pivot high at $0.405. To allow enough wiggle room, the protective stop would need to be placed beneath the minor pivot low at $0.315. There is no resistance above current levels, so use a trailing stop to manage the position. I reiterate, it isn’t one for more conservative or inexperienced traders.Files
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