Westport started going up quite nicely in what looked like wave 1. It still looks like that despite a very large retracement. The alternate would be that we are in an a-b-c for wave 4. This is highly unlikely as the stock would almost have to drop below zero and evenso it should first trade up to about $10+ where a small gap is located. Both RSI and MACD are still supportive so we would stay with the trade or even initiate one at these levels.

In the big picture this stock appears to have completed a large A-B(orX)-C down. Appears is the operative word here. No new low was ever made, it fell short by $0.53, but that does not necessarily disqualify the count. From that low it doubles very rapidly in what we assume is a first wave up. It then retraces most of that, as it should, in a second wave. Next is wave 3, or at worst c, that should try to close the gap. A drop now would negate this count but leave open the simple a-b-c correction with roughly similar targets.

Westport Innovations went from dearly loved by all to outcast for no particular reason. Buy low, sell high is the only adage that counts. If there ever was a stock that fits the bill this is it. As always we were not looking as it bottomed but there is still time. It is virtually guaranteed to go to $7.50 – top of triangle wave 4 – and may very well even close the gap from $9 to $11. Either of those levels will result in a respectable gain with hardly any risk!

In the bigger picture wave 4 is at about $20 which would be a fairly normal 38% bounce. This is a semi-log chart so that does not show that well.  In short this is one of the best that I have seen in a long time.