Globe says Nortel may be on a technical stairway to $8

[闲得慌]

The Globe and Mail reports in its Friday, Jan. 24, edition that over the past year, Nortel Networks seems to have been tracing out a long-term bullish "U" or saucer-shaped bottoming pattern. The Globe's Yola Edwards writes that as Nortel stock rallies in the short term, it could find its next resistance at the upper Bollinger band and the stock's most recent high of $4.08 and then pull back to the 10-day moving average. Bollinger bands are technical tools measuring volatility and relative price levels over a specified period of time and the bands serve as support and resistance levels. The 10-day moving average has been acting as a trading guide, thus any decline after an advance should be closely held around it. Also the 10-day, 20-day and 50-day moving averages have all turned up, adding support to the positive bias. The stock could continue to rally in a staircase fashion within the positive saucer formation and a rally above $4.08 could see the stock advance to the next resistance level of approximately $5.60. Moreover, the pattern's technical measurement suggests a possible target of $8.26 over the next six months. However, a decline below $3 would negate the positive outlook.