Northrop Grumman Corp. declined from about $85 in November 2007 to $34 in November 2008 below a descending trend line (A-B - see dotted line). The stock then settled into a horizontal trading range mostly between $35 and $50 (see dashed lines). The recent rise to $53.16 (C) and above the descending trend line, confirmed the breakout from the large area of accumulation and signalled the start of a new up-move. Only a decline below the 40-week moving average (40wMA) (currently at ±$46) would reverse the current positive status.
Point & Figure measurements provide targets of $64 and $74 (28-per-cent and 48-per-cent appreciation potentials from current levels). The large area of accumulation (see dashed lines) supports higher targets.
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