RICK WILKING
Wal-Mart Stores Inc. (yesterday's close $55.34 U.S.)had a sharp decline from the high of $63.85 in September, 2008, to about $47 in October of the same year (A-B) and stayed below a descending trendline for almost one year (see dotted line). Wal-Mart remained within a horizontal area of accumulation for most of 2009, mostly between $47 and $53 (see dashed lines), but recently it rallied to $55.09 to signal a breakout from the trading range and the start of a new up-leg (C). Only a decline below the 40-week moving average (currently at about $51.50) would reverse the current up-side potential.
Point & Figure measurements provide targets of $69 and $74. The large area of accumulation (see dashed lines) supports higher targets. Use all opportunities to acquire a full position.
Ron Meisels is a contributor to the www.NA-marketletter.com web site. 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.
Source: www.decisionplus.ca