Toromont Industries Ltd. built a large base from 2008 to 2010 mostly between $11 and $18 (dashed lines). The stock rallied above this trading range in early 2011 to a high of $20.33 (A), pulled back to $15.39 (B), then had a sharp rise to $25, producing an extremely overbought condition (C). This was corrected recently as Toromont pulled back toward its 40-week moving average, providing a good entry point (D). Only a sustained decline below about $20.50 would be negative.
Point & Figure measurements provide targets of $27 and $31. The large base from 2008 to 2010 (dashed lines) supports higher targets.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. 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
Infographic: Bullish on Toromont Industries
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