Ensco PLC had a sharp decline from $83.24 (U.S.) to $22.38 in 2008 (A-B) followed by a two-part recovery rally to $60.31 (C-D-E). Subsequently, the stock settled into a bullish technical pattern known as a “W” formation (1-2-3 – dotted lines). The recent rise to $65.19 signaled the breakout above the neckline of the pattern (dashed line) and the start of a new up-leg (F). Only a decline below $54-$55 would be negative.
Point & Figure measurements provide targets of $74 and $79. The large “W” formation (dotted lines) supports higher targets.
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 and Tweets at @Ronsbriefs. They may hold shares in companies profiled. Please see the site for a glossary.Report Typo/Error