Reliance Steel and Aluminum Co. traded in a large horizontal trading range mostly between $35 (U.S.) and $60 for about three years (dashed lines). The stock pierced above this range early this year, and reached a high of $72.90 (A) to signal the breakout and the start of a new up-leg. The current pullback toward its rising 40-week moving average (40wMA) provides an ideal entry point (B). Only a decline below $62-$63 would be negative.
Point & Figure measurements provide targets of $74 and $79 (7-per-cent and 15-per-cent appreciation potentials from current levels). The large trading range (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.Report Typo/Error