Energy Development Corporation (EDC) Bulls Ready To Be Awaken

Energy Development Corporation or EDC in the Philippine Stock Exchange has been consolidating sideways for 5 months now after a good run up since 2009. Fortunately, it could be set for another move higher as it appeared to have formed what looks like a symmetrical triangle during the consolidation process. A break above the triangle's resistance is all we need to confirm the chart pattern. Actually, this could already have broken out today but its 2.4% gain and buying pressure wasn't strong enough. The stock price opened at PHP5.92, went all the way up to PHP6.15 as it tested the resistance and went down to close at PHP6.08.

In any case the bulls awaken and the EDC stocks break out from the symmetrical triangle, a race towards my target price of PHP7.10 is very reachable. That's more than 16% profit from its current price, not bad eh! However, before it reaches that level, it first needs to surpass the PHP6.55 all-time high where there could be some heavy selling pressure. On the downside, its significant support is the 2-year uptrend. If it further drops below that area, the next marker could be triangle's support.

Personally, I'm bullish with this chart pattern given the fact that the 2-year uptrend is intact, the MACD moves above the 0 line and the stock price is above the 100 and 200 moving averages. I'm actually expecting a breakout soon. I may be wrong but I've seen many stocks rise upon breaking out from triangles like this. Still, it's the best to always have a stop loss in hand in case the trade goes against you. A breakout could be a strategic entry with a stop loss placed below the triangle's support if you'd ask me.

Related posts:

1. Trans-Asia Oil and Energy Development Corporation (TA) Awakes? Trans-Asia Oil and Energy Development Corporation or TA in the...
2. PHILIPPINE STOCKS: ENERGY DEVELOPMENT CORPORATION (EDC) – April 25, 2010 It has been more than 3 years since Energy Development Corporation...
3. Oriental Peninsula Resources Group To Make Another Move? Hello traders! My Philippine stock pick for the week is...

Related posts brought to you by Yet Another Related Posts Plugin.