AES Corp. declined from $24 (U.S.) to $4.80 (A-B), had a recovery rally to $15.44 (C), a decline to about $9 (D), a rally to the long-term falling trendline (E) and another decline to $9 (F) where it found support once again. The subsequent rise to $14.01 (G) signalled the breakout from a bullish W formation (dashed lines – C-D-E-F-G) and the breakout above a falling trendline (dotted line). The rise also easily moved above the previous resistance area at $12-$13 (E). Only a decline below about $11.75 would suggest additional base-building is required.
Point & Figure measurements provide targets of $16 and $18.
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. They may hold shares in companies profiled. Please see the site for a glossary.
Chart source: www.decisionplus.com