This is verbatim from the Jan 29, 2011 blog. This was the easy part. A perfect B-wave, a Mnt. Everest situation right at the $100 mark and hitting the upper channel line. I used to consult this company on FX some 30 years ago. They are great at hydraulics and engineering, but not much else. But recently someone must think that they found a way to make water burn. Here are the long and short term charts once again.
The left, longer term chart is there just to show, once again, that wave patterns form with almost ridiculous accuracy. The results are uncanny. Our prediction at that time was for $55, the “pause” level. That was wrong as the stock went to $59. In hindsight we must assume that the wave 5 was a wedge and did not live up to its full potential, normal for wedges. What we did not anticipate is the violence of the next rebound. From $59 to $85 in a matter of three weeks. This melt-up is unheard of. In my opinion this has to be a short covering move. Typically you go short on stocks that have moved up for no good reason other then momentum. So then things reverse it is these same stocks that have to be bought back. But, from an EW perspective this stock will continue down almost certainly. The hard part is waiting for wave 2 to complete (somewhere here and soon).