Extendicare Real Estate Investment Trust had a sharp decline from $13.35 to $6.18 (A-B) and then settled in a large trading range mostly between $6.15 and $8.80 (dashed lines).
The stock has been trading above its 40-week moving average for the past several months and has been trading above a rising trend-line for the past year (solid line). The recent rise above $9 signalled the breakout from this range and the start of a new major up-leg (C).
The stock is currently in the midst of a minor pullback for a better entry, but only a decline below $8 would be negative.
Point & Figure measurements provide targets of $11 and $12. The large base supports higher targets.
Monica Rizk is the senior technical analyst and Ron Meisels is the president of Phases & Cycles Inc. and he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com.