STRL – Sterling Construction hits Retracements

I started to cover Sterling Construction (STRL) on the MSW Index on February 4, 2006 at $18.93 as it gained support at the 200-d m.a. I purchased shares for myself at $19.05 the following week. The stock almost violated a mental sell stop but I held due to support below and have been rewarded with a 26% gain in less than two months. I wrote an extensive blog post here about price targets and retracement levels for STRL, including a chart.

In that post, I said:
“The first method to determine if the stock had bottomed is the use of the Fibonacci retracement levels (in this case, the 38.2% retracement which equals $15.46). It turns out that this retracement level also corresponds with the 200-d m.a. support and lifted the stock higher. Turning to the retracement level on the positive side, the method predicts a top at three common locations:
61.8%: $23.26
50.0%: $21.13
38.2%: $20.13”

Today’s close above the 61.8% retracement level on strong volume gives us a positive feeling about the stock. My target of $30 still exists for the year and my prior post explains where that number was derived.

Piranha