AOL – Market is telling you something, do you Hear? (Update 1)

Since beginning our blog site, the least read blog we did was one on AOL.  What caught our eye was the triple “Break Out/Pull Back” over EBV-3.  Seeing a triple “Break Out/Pull Back” is exceedingly rare and sets up for a low risk trade for those interested.

AOL with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

For those interested, a daily updated chart of AOL subsequent to this post will be maintained on Facebook, here.

As we noted in our blog piece on February 1st, the price of AOL was $17.43.  Last trade on April 9, 2012 was $26.40, for a nice 51 percent gain in two months ….not bad!

OK ModelPriceGuy, what would you do now?

We believe EBV for AOL should hold at $25.77.  Certainly AOL has the ability to go to EBV+2, EBV+3 and maybe EBV+5.  This, however, may take time and will be interesting to see.  You can also add AOL to the growing library of this blog of “Coming out of the Blue” situations that we have written about in past blogs.

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