Pason Systems had a sharp decline from $35.51 to $16.79 (A-B), a recovery rally to $23.10 (C) and then settled in a bullish technical pattern known as an "inverse head-and-shoulder" (solid lines).
The recent rise above the neckline of this formation (above $20.50 to $21.00 – D) signalled a breakout from the pattern, renewed investor interest and the start of a new up-leg.
Behaviour indicators including the rising 40wMA confirm the bullish potential. Only a sustained decline below $18.00 to $18.50 would be negative.
Point & Figure measurements provide targets of $23 and $25. The large head-and-shoulder formation (solid lines) supports higher targets.
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
Monica Rizk
Ron Meisels