The above charts are about 2 years old. We recommended the stock at about $6.90 and sold near $14 for no other reason that that was a nice gain. Since then we lost track of the stock but today we are revisiting it as the picture is , once again, pretty clear. Here are today’s charts.
At the time we were hitting what was an obvious bottom after the completion of an a-b-c corrective wave A or 4. Today we are pretty close to the other side of the channel at $31 with the trend-line running at $35/36 (just $4/5 away!). Again we stress that if all you ever do is buy low and sell high you will do just fine. How do you know what high is? You don’t, unless it is self -evident as in this case. Furthermore it often pays to get very nervous at, or near, double tops, now only $3 away. The wave count is fairly clear here as well. As wave 4 (in green) was a zig-zag and the drop in ‘08 and ‘09 (wave A in red) was also a zig-zag, no alternation would have occurred if both these waves were of the same degree, therefore it is reasonable to assume that they are not. The grotesque overlap leads to the same conclusion, and consequently the move from the lows of ‘09 is not a 5th wave of a 20-year + sequence but a B-wave in a very large A-B-C. Within this the A and C legs are most often either equal or in a ratio of ).618X one another which is pretty well where we are today. (incidentally, even if this was a fifth wave the next leg down would not be any different). The coming C wave should subdivide in 5-waves (as shown) and reach the lower trend-line and more likely breach the lows of ‘09. $6 or so. Needless to say, this is a sell, the only question is if you want to tempt the Gods and try your luck by waiting another $3/4.