Savanna Energy Services Corp. declined from $10.80 to $6.48 (A-B), had a recovery rally to its 40-week moving average (40wMA - C) and then settled in a trading range between $7 and $8.25 and then between $6.50 and $7.50. This price action produced a bullish technical pattern known as a “delayed ending” (dashed lines). The recent move to $8.15 (D) signalled the breakout from this formation and a rise above $8.25-8.50 would confirm the start of a new up-leg. Only a decline below about $7.50 would be negative.
Point & Figure measurements provide targets of $9 and $10.50. The large “delayed ending” 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.