Rally above 'W'-pattern neckline signals start of next major upleg
During the 2007-08 market decline, Clorox sold off and settled into a large multi-year "W" formation (dashed lines). It has now rallied above the neckline of this pattern (dotted line) to a high of $67.86 (U.S.). This price action confirmed the breakout and signalled the start of the next major up-leg. Only a decline below about $63 would reverse the current long-term upside potential.
Point & Figure measurements provide targets of $79 and $89 (18-per-cent and 33-per-cent appreciation potentials from current levels). The large "W" formation (dashed lines) supports significantly higher targets.
Ron Meisels is a contributor to the www.NA-marketletter.com website. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.