From about $28 (U.S.) in mid-2007 (A), Bristol-Myers Squibb Co. sold off and settled into a large base formation (see shaded area). During this base building period, the stock could not overcome the $23 resistance level (see dashed line). Recently, however, Bristol-Myers rallied to a high of $26.62 (B) to signal a breakout from the large base. The current pullback (C) should provide a good buying opportunity and only a decline below ±$22 would reverse the current up-side potential.
Point & Figure measurements provide targets of $34 and $39 (42-per-cent and 63-per-cent appreciation potentials from current levels). The large area of accumulation (see chart) supports higher targets.
Ron Meisels is a contributor to the www.NA-marketletter.com web site. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.
Source: WWW.DECISIONPLUS.CA