ST Engineering has broken the uptrend support and started a correction. Base on the chart pattern, ST Engineering has completed Wave 5 (top at 261.8% Fibonacci Extension) and is currently trading in Wave A of Elliott Wave.

Things to look out for:

• ST Engineering may be finding a support between $4.00 to $4.06. This is another uptrend support and also 61.8% Fibonacci Retracement support for Elliott Wave 5. If ST Engineering does rebound from this level, this indicates the end of Wave A (bearish) and start of Wave B (bullish rebound).
• Wave B rebound will potential forming a Head and Shoulder. The resistance will be at about $4.22 and 20D / 50D SMA.
• Watch for reversal candlestick pattern when Wave B reaches the resistance. Plan for a trade to short ST Engineering when the right shoulder is in formation.

See previous Fundamental Analysis and Intrinsic ...