The Western Union Company (NYSE:WU) Faces Resistance In $18.70-$19.60 Zone
Denver, CO, 08/21/2013 (Avauncer.com) – The Western Union Company (NYSE:WU) (Closed: $18.05, Up: 1.40%) opened flat on Tuesday but soon gathered momentum to challenge the higher levels and closed firmly in the green. The volume at 8 million was the highest in the last few days, way above the average of 6 million. The day’s price action formed an Inside bar or a Bullish Harami candlestick.
In the period of 2006 – 2008, the stock rose in a volatile fashion to reach the high of $28.62 from the low of $18.36. But the subsequent bear market of 2008 had no such hesitation in its movement and the stock plunged vertically to $10 levels in just 3 months. It made its final bottom at $10.05 in March 2009 and staged a recovery. This corrective rally was terminated at $22.03 in 2011 and was clearly subdivided in 3 waves. That implied that the unfolding corrective rally would take the form of a Flat pattern or a Triangle as only these two patterns would have their first leg in 3 waves. The next fall, correcting the rally of 2009 – 2011 again was divided into 3 waves, reinforcing the assumption of one of those two patterns forming. The third part of the correction from 2009 is currently under way, the rally from the 2012 bottom of $11.93. This rally will give us the final clue in the coming months. Again if this gets divided into 3 waves, then a triangle is forming and we should stay away from the stock for another 1 -2 years. If it unfolds in 5 waves, then we can ride on it for an eventual target of $24 levels or even higher.
The stock has broken a down sloping trend line and as long as it stays above $17.30, the bullish possibilities survive. The supply zone of $18.70 - $19.60 will provide resistance.