DRYS update

Here is the backlink to my first post on DRYS in which I indicated that I thought that a significant bottom had been put in place and that after wave 1 was done it should pull back into wave 2 and then explode into wave 3 (or C).

Wave 1 went from .76 to 1.03 which is > 50% in 3 trading days.  If my count here is correct then it should pull back a-b-c over about the course of 1-2 trading days.  The pullback options are the usual suspects:

• level of the prior 4th (probably not)
• 38.2 (still seems light for something this volatile)
• 50 (yeah maybe)
• 61.8 (don't be surprised by a deep vee wave 2 for this stock)
• gap fill.  This of course would be fulfilling on several levels for this wave 2
• deep vee second
• fills an open gap/removes that as a distraction going forward
• brings the chart back to mid channel of a falling wedge

Here is what that gap fill would look like on the 240 minute chart - a move back to center channel. 

Now, if this keeps going and falls below the lower rail to perhaps 55-58 cents then I think it is a screaming short term buy as soon as it comes back up into the wedge channel.  The value of something like this over JNUG is that it has no time value built in and, at least for now, DRYS is making its debt repayments on time having completed a major one on Dec 1st.  IF they were near default they would not have paid that money.  Also, commodity inflation will be good news for DRYS.  The negatives are that I think the leverage is much higher on JNUG, again due the tripling factor and the options time value.  The minimum short term bounce from here for DRYS is the top of the falling wedge as shown.  For JNUG, the $8-12 range is a cinch as the first resistance level and I will not at all be surprised to see $30-$36 happen.