Stock Chart Analysis WFR

Posted by downtowntrader | 2/10/2008 08:09:00 PM | 0 comments »

Stock Chart Analysis WFR

MEMC Electronic Materials, Inc. (Public, NYSE:WFR)

WFR had one of the more interesting charts I looked at this weekend. WFR broke out of a long base last October and had a very strong impulsive move higher. But then it retraced the entire move which put the underlying trend into question. It is at a point where it came back to retest the breakout area and is trying to bounce back from it. The interesting part of this chart is how it is showing two different possible chart patterns forming. The first one is a large possible head and shoulders top. I highlighted this one in blue and the neckline is actually under strong horizontal support. If it were to break down and set a lower low under 59, then it would probably seal the deal on the H&S top. The other pattern is a smaller reverse head and shoulders which if successful, would negate the possible H&S top. I highlighted this pattern in red and if WFR breaks the neckline, it would project a target price of $95 which takes it close to prior highs. It looks to me like the smaller reverse head and shoulders has the higher probability of playing out, but either scenario looks like it would result in a great move.

Good Trading,


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