The volatility on this one is pretty incredible. The model above shows that it could go to $33 to fill the gap. So now it is in the 33s but the wave pattern that has unfolded since the last post makes me wonder if the real bottom isn't $30.14 (the 78.6 fib).
The reason I say this is how the chart seems to have formed a perfect w3. Folks, please listen to the logic I will present right now because most people will learn something about herding behavior here. We have one of the best examples of the EW principle in front of us for one reason: when the herd is in wild eyed panic it does not concern itself with being cagey or doing switch backs or all the other tricks that making herd hunting as much art as science. The just flat out run. When the herd does this, it's mind is made up, it is not thinking about anything except reaching the destination. Because of this, the underlying EW pattern which is present in all herd moves becomes completely obvious. This is why I always say that the EW pattern is the most clear during 3s and Cs.
In any case, the zoom in to the 60 minute chart below shows that a significant bottom has likely been put in and now at 25% bounce to the level of the prior 4th is indicate. In this case it will likely be when red 4 and green 4 converge at, well, 44.
After that I would expect either the red path (a trip to the 78.6 fib) OR the blue path (wave 5 = wave 1 in size). But after this, I expect the months of April and May to be good to the stock. Not because its worth anything folks. Please don't come at me with "fundamentals". This stock proves there is no real such thing as fundamentals. How can a FLOORING company go from $7 to $120 in an exponential ramp only to come crashing down like this? Fundamentals, if they were real, should say "hey, the PE is 10, that is low. The PS is .92, very low. It has small cash (20 mn) but no debt (except that laid upon them by the government in the next few months for selling wood that does not meet CA formaldehyde limits....). They are profitable, a real business.
No, the shares will bounce because herds don't travel in straight lines forever. Very soon, someone will suggest that the testing might have been done wrong by the accusers and every will pile back into the shares for fear of missing out. The EW principle says that it is very likely it will happen and soon.
Now, I can't predict the future any more than anyone else. The above model has nothing to do with me. It has to do with historical patterns of travel that are ingrained into the herd by genetics. Just remember that the wave shape is the determining factor, not price targets. So after this breaks out the top rail of that falling wedge, buy in and then set stops just below the top rail. That is the highest odds way of catching this bounce.
This one should be very interesting to watch.
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