$13.35 Is The Make Or Break Level For Itau Unibanco Holding SA (ADR) (NYSE:ITUB)

Denver, CO, 08/06/2013 (Avauncer.com) – Itau Unibanco Holding SA (ADR) (NYSE:ITUB) (Closed: $12.78, Down: 3.03%) snapped its 3 days long rising streak on Monday and corrected on a volume of 8.5 million, much lower than the average volume of 12 million. The volume pattern implies that the fall in nature is corrective only so far.

The chart of this stock is marked by fast falls and labored rallies. This pattern has been going on for the last 3 years since it made its final top at $26.30 in November 2010. Since then we have got 3 major drops punctuated by 2 major rallies. This brings the possibility of a big bounce coming in the next few weeks. The rally could be a corrective B wave only if we take the whole fall from the 2010 top as a Double Corrective running. This scenario gets credibility from the perfectly channelled price action during the fall. The July 2013 low of $11.38 is exactly on the trend line. On the other hand, the bulls could argue that the rally from the 2008 bottom of $6.7 to the 2010 top of $26.30 is the first part of the rally and after the correction ended at $11.38 the price is getting ready for the next major bull run. Let’s not get too ahead of ourselves. Either way, a rally can be expected if the pending confirmations are realized. For now, even the indicators are non-committal.

The daily chart shows the drop from the May 2013 top of $17.73 is contained in a down sloping channel and the price has hit the upper boundary on last Friday. That makes the latest swing high at $13.35 as the breakout trigger. But failing to cross that would enable the bears to push the price down once more. In the short term the price would weaken below $12.45 - $12.55.