I've been watching and calling the action on DRYS for several weeks now. I wasn't sure if this recent move up would really turn into a 3rd wave but once it broke to a new high then that was the trigger. So now it's time to look at the wave again.
In short, I think DRYS is pushing the final stages of 5 big waves up and is now ready to take a big pullback. In fact, this most recent wave stuck me as not have the look of a 3rd wave and now I see why: it's not a 3rd but rather a 5th. DRYS now has 4 waves up where 1, 3 and 5 can all be joined by a line.
There is no law that says this 5th wave can't throw over quite a bit
more and in fact $5.20 might be possible since it looks like we are
forming a 4th wave triangle as you can see below on a zoomed in version of the chart. And if the triangle is only 4 of 3 of 5 then perhaps $6 is even doable. But the easy money has now been made and the downside is high. When falls back a-b-c to the prior 4th, the target is $2.60. So there is some to gain but a lot to lose. Better to let it play out if you missed the first run and wait until big wave 2 is done and try to catch the 3rd wave in 2014. But let 'er ride until a 5% to 7% trailing stop takes you out and then walk away and don't look back.
Friday, December 27, 2013
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