Commercial Metals (Friday’s close $31.05) traded in a large horizontal trading range mostly between $14 and $24 for about three years (dashed lines). The rise above the top of this range (A) followed by the rise to $36.49 (B) signalled a breakout and the start of a major up-trend toward higher targets.
The stock had a minor correction toward its 40-week Moving Average (40wMA) recently, where it found good support (C) and now appears ready to resume the up-trend.
Behaviour indicators including the rising 40wMA and the rising trend-line (solid line) confirm the bullish status. Only a sustained decline below $29-30 would be negative.
Point & Figure measurements provide a target of $39. The large trading range (dashed lines) supports higher targets.
stock
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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