Action film starring Clint Eastwood and The Rock. Summer 2012
Just kidding about the film but I did want to discuss something that you will see from the Technical Analysts in their charts from time to time: the Measured Move.
Let’s get straight to an example:
Here is a Weekly chart of MCP (Molycorp Inc.) showing 2 angled lines of identical length. The first line is drawn from the lower shadow of the candle from the Friday of 11/19/2010 to the upper shadow of the candle on Friday 1/7/2011. The 2nd line is drawn from the shadow from Friday 3/18/2011 to a target near the 75.50 level (noted in the text on the chart when posted).
As you can see from the current chart below, this “Measured Move” was a great guide in determining where price was headed. Of course these moves often come up short or overshoot, but do serve as a high probability target determination.