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A Jean Coutu pharmacy in downtown Montreal

SHAUN BEST/REUTERS



In our previous report (March 28, 2009, $7.75), we suggested that Jean Coutu could rally toward $10-$11 but that the upside was limited due to the long-term falling trendline (solid line). Soon afterward, the stock rallied to $10.94 (A), and then, as expected, encountered resistance at the long-term descending trendline. Subsequently, the stock settled into a pattern of lower highs and lower lows (dotted lines) and then into a pattern of higher highs and higher lows, to signal a reversal (rising dashed lines). This action ended the falling trend and signalled the beginning of a new up-trend.

Point & Figure measurements provide a target of $14. Only a decline below the 40-week moving average (about $10) would be negative.

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.

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Chart source: www.decisionplus.com

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About the Authors
President of Phases & Cycles Inc.

Ron Meisels, President, Phases & Cycles Inc., has been active as an Analyst since 1971. He was Vice President and Director of Technical Research of Nesbitt Thomson (now BMO Nesbitt Burns) from 1982 to 1990. He was ranked among the top three technical analysts by Canadian Institutions for six consecutive years (Brendan Wood Survey). More

Senior Technical Analyst at Phases & Cycles Inc.

Monica Rizk, Senior Technical Analyst, has a Bachelor's degree in Business Administration and completed the Canadian Securities Institute course. She has been with Phases & Cycles since September 2000 and specializes in the research of Canadian and US stocks using Point & Figure as well as bar chart analysis. More

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