We always seem to underestimate the forces that are brought to bear on stocks to push them up. We were wrong in thinking that this stock was a sell at about $27 back in early July as, unexpectedly , the stock did manage to add the extra $4 to double top and then some. But nothing has changed so the outlook remains the same. Theoretically , of course, a valid argument can be made that this stock should trade at higher, if not much higher, valuations than it did back in 2006 when interest rates were also relatively low but double what they are today. But then the market is always supposedly forward looking so the boost from the discount rate may itself be discounted.

Calloway trades at a P/E of about 85, according to Bigcharts, yet it earns slightly more than 6% in distributions. No idea how well the fundamentals stack up , but IMO this one is pretty well priced to perfection, just as it was in ‘07.

EW wise there is some ambiguity in that the drop in ‘07/’09 could either be a 5-wave move or an A-B-C. But, either way the next significant move should be down by about $10 even in the optimistic scenario. There does not appear to be any real immediate upside all though some might argue that double-topping is just around the corner. In the highly unlikely situation that this actually happens only $4 would be added to the value of the stock, ergo the risk/reward ratio is very much against you. Sell or use a tight stop.