Lennar Corp. declined from about $69 in 2005 (not shown) to $3.30 (A), settled in a trading range between $6 and $11 and then in a range between $12 and $21.50. This price action produced a bullish technical pattern known as a Duplex Horizontal (dashed lines). The subsequent rise (B-C) easily pierced above the resistance at around $21.50 and signalled the breakout from the Duplex Horizontal formation (dashed lines). Only a decline below $20-$21 would be negative.
Point & Figure measurements provide a target of $36. The Duplex Horizontal formation (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.
Chart source: www.decisionplus.com
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