Motorola on the verge of a new downturn

By Fabio Verdelli
13 July 2009 @ 11:30 am EDT

MOT – Motorola – The multinational telecommunication company saw its shares returning back to the main bullish support line at $6.05 increasing the odds of a possible trend reversal. From October 06 peak at $25.50 the High Pole pattern that developed dropped a hint of turnaround projecting a downside target at $16.20, level reached on August 07. The reversal realized on November 06 when the movement penetrated the bullish support line at $21.30 clearing the way for further contraction. The first wave of downturn has been contained by the double bottom pattern at $17.50 where prices started to swing sideways. The fall continued reaching $15.30 on August 07 when a corrective upmove temporarily changed the course gaining back some ground to $19.20. Prices turned down again dropping sharply and reaching the lows on November 08 at $3.00. A sideways movement with base at $3.00 and resistance at $4.90 extended until April 09 when the double top breakout at $4.60 followed by the triple top breakout at $5.00 triggered the trend reversal. On the way up a double top developed at $6.90 and now prices are struggling to guard the main bullish support line solidity. Relative Strength vs the market is positive for the long term but still negative short term predicting a period of underperformance for the stock. The weight of the evidence is still slightly on the buying side but this needs to be confirmed by the integrity of the long term bullish trendline. Stay long and increase at triple top breakout at 7.00 with medium term target at $9.10. In the long term the objective is set at $12.00. On the downside close all longs at triple bottom breakout at $5.90 which coincide with the penetration of the main bullish support line. Contraction may extend down to $4.70 and then to $4.20.

Motorola on the verge of a new downturn

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