"National Australia Bank - the new year rise ?"

Back on November 16th we looked at National Australia Bank, and asked, "where is NAB heading ...?". The price at the time was around $30.50, and our analysis showed that a Wave 4 had been completed and confirmed, and that the price was beginning to retrace down and had broken out of the regression channel. In fact we noted in the posting for November 16th that :.

 "... it would seem that the stronger weekly chart indicates that NAB is trending lower but only for the moment and that we should expect a near term low around $27.85 and then for the stock to resume it's upward trend early in the new year ...". 
 

As we can see from the above chart, NAB did in fact get to our target of $27.85 and then dropped substantially lower, when NAB announced a counter offer to AMP, to take over AXA Life Insurance, back on December 17th 2009. As a result of this announcement, NAB dropped over $3.

One short term opportunity for all the Bulls out there might be to look for a short term rise in NAB to fill the gap back up to the earlier target of $27.85.

But wait there's more ....

Note that we seem to have just completed a Wave 5 low and that any retracement back up to the earlier target may be short lived as the market pulls back to complete a wave 2 low which would be back down around $26.50. The good news is that if this pattern holds, then we would see the early beginnings of a new Wave 3 high, with a potential target back up around $31.50 by mid January 2009.

So where is NAB heading next ?.

Cheers.