HEAD & SHOULDERS

American Axel & Manufacturing Inverse H&S In The Making

07/14/11 08:30:14 AM

by Koos van der Merwe

It looks like an inverse head & shoulder formation in the making.

Security: AXL
Position: Accumulate

American Axel and Manufacturing (AXL) is a company with locations across four continents. One then wonders why the share price is as low as it is. With its manufacturing ability, and its growth as shown in its recent financial results, results that gave me a 5 out of 8 analysis rating, the company looks like a good long-term investment.

FIGURE 1: AMERICAN AXEL

Graphic provided by: AdvancedGET.

Figure 1 shows how the price fell from the high of $16.19 in January 2011 to the low of $9.72 by June 2011, and this in spite of a market that rose strongly over this period. However, the share price has now formed an inverse head & shoulders formation, suggesting a target of $13.60. With the price at $11.32, this is a comfortable return. I would be a buyer of AXL once the price moves above the neckline at $11.66.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address:	3256 West 24th Ave
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E-mail address:	petroosp@gmail.com

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HEAD & SHOULDERS

American Axel & Manufacturing Inverse H&S In The Making

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