Hamilton's E-Wave Analysis

WFI, WaterFurnace Renewable Energy Inc.

wfi

WaterFurnace builds units (essentially compressors) for geothermal applications. They extract the heat from the ground (roughly 15 to 16 degrees C.) and then upgrade it to a useable level for home heating. For each unit of energy that goes into the system, 5x as much is returned in heat. Large in ground loops extract this energy by running water (and anti-freeze) through them, so in a manner of speaking these units appear to be burning water, hence the name. The technology is not new, it is the same one used by Frigidaire a hundred years ago, but it took time to overcome some of the corrosion problems. High fuel prices and low interest rates certainly helped to put this on the map.

The stock completed a 5-wave sequence. The middle high point (there are 3) is the real one, which by the way, is another good example of getting out at double or triple tops. The correction seems to be taking the form of A-B-C. Presently we are somewhere in the 3d wave. Typically we should drop to a 62% retracement, a little above $12. Typically wave C relates to wave A by a factor of 1.62X which suggests $12. Before we get there we still need to finish 3 and go through 4 and 5. $ will most likely be a flat or triangle (alternation) so we can monitor this one as it moves to the expected target.

The stock pays 4.18%.