Market Talk with Piranha is currently moving to its new home at chrisperruna.com. The new site is up and running but many of the posts need editing as the images and stock charts did not transfer successfully (thanks blogger). I will post all new entries to both blogs – Thank you for your patience while I make this change!

Monday, March 27, 2006

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

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