Cascades Inc. (Friday’s close $14.13) stayed in a down-trend from mid-2017 to early-2019, below a descending trend-line (dotted line) and a falling 40-week Moving Average (40wMA). It rose above this line and above its 40wMA in mid-2019 (A) and then settled in a horizontal trading range mostly between $10 and $13. This price action produced a bullish technical pattern known as a V-Extended formation (dashed lines). The recent rise above the top of this pattern signalled a breakout and the start of a new up-trend (B). Behaviour indicators including the rising 40wMA confirm the bullish status. The stock recently pulled back toward its Average to provide a good entry level. Only a sustained decline below ±$12 would be negative. Point & Figure measurements provide a target of $16.50. The bullish V-Extended formation supports higher targets.
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Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com
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