Friday, 22 May 2009

FPH Breaks a Cup

(the original post could be found in Absolute Traders)

Another issue has caught our attention by forming a major reversal pattern.

FPH has been going sideways since June 2008 and has formed what we think is a cup & handle.  The cup started on August 2008 and ended March of this year.  Right after that, a symmetrical triangle, which serves as the handle, also formed.  Yesterday happened to be the day of the breakout.  Based on our estimates, 26.50 was the right time to buy.  Should this surpass the resistance of 30.50, we could probably see this reach the minimum target of 44.25.

The moving averages have already turned bullish with the 65-day moving average above the 130 & 260MA.  At the same time, the MACD has been oscillating above the zero line, giving us the idea that FPH is really bullish.

Should there be some correction for FPH, it might be good to pick this up around 26.50.  Happy bargain hunting!

Recommendation: Buy on correction
Resistance: 30.50
Target: 44.50
Cut loss: 23.50

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