July 5th this stock looked like a screaming buy. The only caveat was that it was still conceivable that the stock could drop to $25 ( it had already reached $26.63).This would be a likely event if there was a triangle in the a-b-c correction down. With the benefit of hindsight it is clear that there was no triangle so the low had already been reached. For those that bought rather than wait for an extra dollar or two things have worked out well. Today the stock is up 20.27% to $ 34.85. The stock should reach $40, and if the analysis was correct, a lot higher.

I could not get a longer chart to see what this stock did during the tech. bubble, so I am simple assuming that the near $100 high shown on this chart is THE high (by the way, another fitting example of the Mnt. Everest syndrome). From that top the stock corrected losing 77% of it’s value and did so a a very clear zig-zag, actually an a-b-c X a-b-c , in which the X retraces about 62 % of the first a-b-c. These patterns can repeat 3 times which would lead to an a-b-c X a-b-c Y a-b-c. More than 3 is not possible (stated more correctly, none have ever been found!) In this particular case it is highly unlikely , but not entirely impossible, that a third a-b-c is forthcoming . That would take the stock to $0 or below. So I assume that the $15 low is THE low. If so it follows that a new bull market started at that point.

Notice that the low is not in synch the general market, it occurs 4 months later. If we are in a new bull we should see 5-waves up to start the process. This is wave 1 up of the new bull. Then we should get a (deep) correction for wave 2. So far we have an a-b-c down, but the c is probable not yet complete. An ideal target would be around $25 where c=a, 5-waves for c would be complete and wave 2 would have retraced about 62%. It does not have to do that but it might. If it does it should be a buy.

By the way, this computer hardware manufacturer trades at a P/E of about 7.