This is a good example of a double top, a rather precise one from which the stock has dropped almost 13% already. For the record , back in August last year, we suggested that the stock was a sell at about $50.(see chart below and previous blogs). This is a great company but so is a single line move from $15 to $55. The possibility exist that the stock drops to $35 (in a bull market) or further if we get a double dip type of scenario. This is a simple case of buy low/ sell high. Alternatively rather than selling one could use a stop-loss at about $46

This is a fascinating company, not just for it’s businesses but also the performance over the past 5-years. At a glance it is obvious that the stock double-topped just recently at about $50; always a good time to step aside if just temporarily. On closer scrutiny the last up-leg – from $35 to $50, see detail chart -, is quite clearly a three-wave affaire (at least so far), coming immediately after a three-wave correction from $45 to $35. This suggest that the stock has in fact peaked. An immediate target would be $35 again. However, if the entire move from the low of $15 is a B wave (the A-B-C shown in the chart would in its totality constitute wave A, then wave C may be in progress which could (repeat; COULD) imply a return to the $15 lows.

Time will tell but in the meantime stepping aside is the only good option.