There’s still some waiting that needs to be done for EDC but I believe it’s just gearing up for some momentum. After falling from its high back in October 2007, EDC has rebounded from its lowest point in December 2008, and has reached a high of 4.40 just this April. It is currently continuing its consolidation but this could be a big kick when the momentum shifts.
I’m assuming that the pattern this stock is trying to form is a cup and handle. Assuming that 4.40 is our resistance, and 1.82 is lowest point, we project our difference to 4.40 and we get 6.98 as our minimum target. But since the stock doesn’t move by 2 centavos at that price, I’m readjusting our target to 6.95, not so bad considering that that’s nearly 60% in potential returns.
Our MACD confirms the bullish momentum but has waned from its high. When this stock breaks out, you can bet that the MACD will push itself to higher levels.
Anyone for a cup of tea?
Recommendation: Buy on breakout
Resistance: 4.40
Trigger buy: 4.45
Target: 6.95
Cut loss: 4.35
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