Today in pre-market trading MPEL reached 7.25. A long talked about price target, 7.20 has been in the mix since one of the original buy signals was placed for MPEL in February of 2010 at $3.70. Trading in MPEL closed off these targeted highs on 33.41 million shares traded. Almost 6 times the average volume.
This initial trading set up was derived from the December 31, 2010 low of 3.26 holding and being a possible price zero point to a bullish wave sequence higher. When MPEL tested this low successfully in late January early February, the potential for a wave 1 formation was in play.
Since this call several other buy signals have been placed and met in accordance with this initial wave 1. Right now MPEL has completed 5 waves from this wave 1. The first wave having been the 4.35 price high on January 8, 2010, the wave 3 high being the April 9, 2010 high of 5.68, and the wave 5 high being the 7.20 price high that MPEL has just traded to today.
Since this trading price target has been met there is reason to believe that MPEL will make a correction of this move. However, a more detailed look at the larger trading time frames will be necessary as not only bullish waves contain 5 waves.
As well, by trading to 7.20, the MACD daily chart for MPEL has surpassed the previous waves high, which was counted as wave 3 in the move just described and shown in the chart below. This could now be a wave 3 internal of a larger time frame if the trend is higher. This is not unexpected if consideration is given to the fact that every wave 5 is a wave 3 of a larger time frame. It is important to evaluate your trading price targets based on time frame.
