TransAlta Corp. declined from $38.10 in July, 2008 to $17.96 in March, 2009 (A-B), had a recovery rally to $24 in April, 2010 (C) and then settled in a horizontal trading range mostly between $19.50 and $22 (dashed lines). Recent price action (D) suggests a potential breakout and the start of a new up-leg. A sustained rise above $23-$24 would give this signal. Only a decline below $20.50-$21 would suggest the stock requires additional base-building.
A rise above $23-$24 would signal an initial Point & Figure target of $29. Higher targets are visible.
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
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