Cascades Inc. rallied from $1.70 to $9.80 (A-B), but when it violated its 40-week moving average (40wMA – C), it began a long decline as illustrated by the falling trend-line (dotted line). The stock eventually settled in a trading range mostly between $4 and $5 (dashed lines). Cascades had a breakout from this range recently (D) followed by a pullback to its 40wMA. A rise above about $6.25 would confirm the resumption of the up-trend. Only a decline below about $5.25 would be negative.
Point & Figure measurements provide targets of $7 and $8. The large area of accumulation (dashed lines) supports higher targets.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. (www.phases-cycles.com). Ron Meisels is a contributor to the www.NA-marketletter.com website and Tweets at @Ronsbriefs. They may hold shares in companies profiled. Please see the site for a glossary.
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