Transelectrica (TEL) Chart Review and Recommendation

• From December 2007 until March 2009 - descending channel, buying shares is insanity on an descending channel - best trade is to wait for a break-out of this channel
• 16 April 2009 - The price breaks this descending channel - Here you can start buying shares, in small steps and incremental 
• January 2010 - It forms an Inverse Head&Shoulder, which is a formation of trend changing, implying the downtrend has finished and a new uptrend is on the way - Price Target for this formation being the height of the Head&Shoulder added to the breakout point. In our case the height was 6 (14 -8) added to the breakout around 14, giving a price target of 20.
• April 2010 - the price reaches 22 and then starts coming down to retest and validate the Head&Shoulder neckline
• February 2010 until June 2011 - Transelectrica price chart formed a "rising wedge" which implies the buyers aren't forceful enough to push the price on an powerful uptrend. It broke down from this pattern in July 2011 and re-testing the Head&Shoulder neckline.

Right now the price will oscillate between the 14 RON neckline support and 21 RON given by the break-out of the rising wedge formation. Where the price will take it it will show the future trend.
My advice is BUY if the price moves over 22 RON and SELL if the price breaks the neckline at 14 RON.


Have a great day everybody!