Teradyne, Inc. (NYSE: TER) May Bounce If $15.55 Is Not Broken

Denver, CO, 07/26/2013 (Avauncer.com) – Teradyne, Inc. (NYSE: TER) (Closed: $16.64, Down: 3.76%) spent a volatile session on Thursday after the company announced its quarterly result. The profit going down by 40% didn’t please the market and the stock opened gap down. After some initial attempt to rally, the price crashed 10% lower than the previous close but managed to recoup most of the intra loss by the close. The volume was huge at 11 million against the average of 2.5 million.

The long term chart of the stock shows a very interesting and potentially bullish pattern – a mammoth Inverse Head & Shoulders encompassing 9 years of price action. The stock made its last major high at $30.70 in January 2004. It has all been downhill since for the stock as it crashed to $2.80 by 2008. The subsequent bounce took it to $19.2 by March 2011 and the price is again trying to reach that level. All this price action traced the bullish pattern mentioned earlier. The congestion period of 2004 – 2007 makes the left shoulder, the drop from the 2007 high to the 2008 bottom and the following rally to the 2011 top makes the head and the price movement since then is making the right shoulder now. Currently the neckline is at $19.75 - $19.80 levels but that value will increase by about $0.10 every month. So a break above this would signal that the major bear market since 1999 has ended for the stock at the 2008 low and would imply a target of about $35 - $36 in the coming months, close its 2002 peak.

The indicators are non-committal but there is a possibility that an Irregular Flat correction has ended at $15.55, which has a bullish connotation. In that case the price should bounce to a new high if that low is protected. Major support resides at $14.50 - $15 in case of further downside.