Murphy Oil Corp. declined from the high of $78.16 in April, 2011 (A), and settled in a bullish technical pattern known as a “W” formation (dashed lines). Recent price action suggests that the stock is on the verge of a breakout above the neckline of this pattern (B – dotted line); a sustained rise above $65-$66 would confirm it. Only a decline below $59-$60 would suggest additional base-building is required. A sustained rise above $65-$66 would signal Point & Figure targets of $74 and $79. The large “W” 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