In the past few days, MPEL has received many new price targets and performance ratings from Wells Fargo, Morgan Stanley Deutshe Bank, Citigroup and Daiwa. Also, the price target that ssttrader issued on May 25, 2010 was almost hit on September 28, 2010.
The 5.40 short term price target was missed by 3 cents, but this trade has made you a nice 52% gain. Lets take a look and see how the chart is performing for the next long term price target of 6.20.
It has been hard to read the chart since the 3.42 low. Is this part of a correction faze from a larger parent wave? Has all of the trading since the previous 5.68 price high been a wave 4 correction of a larger parent wave lower? Does this mean that the current move higher is part of a C wave higher of an ABC correction for a downtrend on an even larger time frame? The questions are somewhat open because of a relatively small period of price history available to the stock beginning in 2007. We’ve taken a look at the MPEL chart many times before and whether the chart has completed its long term downtrend or not is still in question as discussed previously.
It appears from the daily chart that the high made on April 9, 2010 was a wave 3, but the MACD does not give great clarity at this time frame and the following correction from this price point was more extreme than expected. In this particular case we will focus on the projection that was based from the buy signal, that the 5.68 price high on April 9, 2010 was a wave 1 peak.
In this scenario you would use the 3.42 price low as a price zero point. Then use the 4.59 price high on June 21, 2010 as an internal wave 3 price high. Using this magnitude based on the daily charts MACD and price motion, you get 5.31 as a price high target, close to the 5.37 high made on September 28, 2010.
The elongated price motion between the 4.59 price and 4.14 price low marked would be internal wave 4. This chart scenario leads to a parent wave 3 price target of 7.65 and an internal wave 3 of wave 3 price target of 6.31, which the long term price target of 6.20 was based upon from previous projected numbers.