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Sherritt International Corp.'s recent surge is a holiday-season gift that may keep on giving, says one Bay Street technical analyst.

Dennis Mark of National Bank Financial said in a research note that Sherritt's rally over the past three weeks has broken the stock above the trading range it had been stuck in for more than two years. Now, he said, there's little in the technical charts to suggest the stock is headed anywhere but upward from here.

"Thin overhead resistance suggests the path of least resistance is up," Mr. Mark wrote.

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Sherritt's stock has risen 11 of the past 12 trading sessions, for a gain of better than 10 per cent (despite the fact that the one decline in that period was a big 4-per-cent pullback on Jan. 6).

In doing so, it broke out of a 27-month rut between $6 and $9. And it topped $9 on Wednesday on rising volume, which Mr. Mark took as a bullish sign for further upward momentum.

The analyst pegs his upside target on the stock at between $12 and $13 - which represents an increase of 32 to 43 per cent over its price of $9.10 in late-morning trading Thursday on the Toronto Stock Exchange.

Not that I'm doubting his technical assessment of Sherritt's chart patterns - technicals are hardly my strong suit. But that would be a heck of a pop for a stock that's already surged nearly 60 per cent since last June. Maybe $13 is in the cards - or, rather, the charts - but you have to wonder if there won't be a healthy correction in there somewhere on the way up, don't you?

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Economics Reporter

David Parkinson has been covering business and financial markets since 1990, and has been with The Globe and Mail since 2000. A Calgary native, he received a Southam Fellowship from the University of Toronto in 1999-2000, studying international political economics. More

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