Forzani Group Ltd. declined from $26.50 to $13.61 (A-B), settled into a trading range between $13 and $18 (left shoulder), sold off into another range between $7 and $10 (head) and then rallied and settled into another range between $12 and $16 (right shoulder). This price action produced a bullish technical pattern: an inverse head-and-shoulder formation, which usually supports significantly higher targets. The rise to $17.71 (C) pierced above the neckline (dotted line) to signal the breakout and recent price action (D) suggests the start of a new major up-leg. Only a decline below about $15 would be negative.
Point & Figure measurements provide initial targets of $21 and $24.
Ron Meisels is a contributor to the www.NA-marketletter.com website. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.
Chart source: www.decisionplus.com
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