I'd like to suggest something completely whacky. [PLUG]

I recently came across a chart that astounded me when I saw it and I want to share it with my readers.  Not only as a potential gambling bet but also as a potential proof point of the Elliott Wave principle.  As it turns out, people seem to be more impressed by things that they perceive to have low odds of happening even if they themselves have no idea how to set the odds.  In fact a lot of what we "know" is simply what we think we know.  And we are allowed to continue our belief in knowledge of these things even if they hold no truth because many of these things simply don't happen and thus are never put to the test.

When it comes to EW, I like difficult tests.  I think I have proven that on many occasions before in these pages.  And so here I am to risk personal ridicule again, saved only by the relatively small readership of my blog.  But this time what I will propose won't look simply difficult; it will instead appear to be completely impossible.  And in fact, it may turn out not to happen because EW is about odds and not certainties.  But if it does not transpire it will not, IMVHO be because it was never possible in the first place.  In fact, my model strongly suggests that it will be not only possible but in fact the most probable outcome.

And so I bring to your attention the curious case of Plug Power, ticker PLUG.  To be honest, I really don't know their business.  I know of them because I have followed Ballard Power (BLDP) for a long time simply out of interest in fuel cells (devices with essentially no moving parts that turn flowing H2 gas into electricity).  I've always thought it was cool tech even if it has taken forever to become commercially viable.

PLUG IPO'ed back into dot bomb with a bang.  In the blink of an eye it went from $250 to $1500 based on nothing but blue skies and Wall St lies.  Yeah it was the future of electricity, gonna put the internal combustion generator out of business, blah blah blah.  As you can see, it succumbed to dot bomb like all of the other credit Ponzified stocks out there.   Who at $1500 (or even the IPO price of $250) would ever have thought that it would plummet to $2?  If you ever tried to tell them that this was going to happen they would get angry and yell in your face: "THAT'S IMPOSSIBLE!"



Well, I think PLUG is now as potentially undervalued now as it was overvalued back in Y2K.  And the reason I think this is of course completely unrelated to their business.  I don't know jack shit about their business, their prospects, their contracts or anything else.  I glanced at their "fundamentals" and they are beaten down for sure.  But I didn't even bother to look up the last earnings transcript and I think it would be a waste of my time to do so because the chart is likely telling me everything I need to know.

Back in 2013, as you can see from the chart below, this thing bottomed near zero.  Then in March 2014 it caught a major bid to $11.75.  From the log scale chart below it is clear that the low was well under 30 cents.



In fact, by downloading the historical daily price data from Yahoo finance and then sorting on the low of the day we can see that the actual all time low was 12 cents on 2/27/2013:



Now, given the March 2014 rebound to 11.70, we are talking about a 100+ fold increase.  While most were selling at the bottom, some people realized that risk reward at 12 cents was asymmetrical: little risk and high potential reward.

So to think that this stock cannot make a 100 fold price increase is foolish because, well, it has already done so!

So now let's look forward.  It's pretty clear that I count the move up to $11 and change as 5 waves up.  That makes it either 1 or A.  And now I think we are within spitting distance of hitting the C of E wave to form green B.  Are you with me?  What comes after B?  Yup.  C.  And so I present to you a potential 50+ bagger staring us all in the face.  Again, the chart below is monthly, log scale.

How many people in the entire world do you think have this thought?  I might be one of the few if not the only one who sees the explosive potential here.  I only say that because it mos def requires an EW view to believe and EW is not a very common discipline.  Very few people that I have ever met had any idea about it before I explained it to them.

In any case, clearly the wave from cyan 4 to cyan 5 was motive.  And that is putting it lightly.  Clearly a bottom was found and a bounce ensued.  Some might say "yeah, right up to the level of the prior 4th at black 4 - you missed your chance dude".  But then I would observe that the move up into blue A is not three waves but rather five.  And that means it could not be the a-b-c to the prior 4th that matters.  In fact, cyan 4 is the proper "prior 4th" wave bounce target according to the larger count from 1500 down.  In other words wave 5 down of the crash from 1500 began at $105.  Thus the retracement should be back to 105 in an a-b-c fashion.  Well, folks, A is done and B is done or very close to it.

Need more?  What do you think I would call that wave between blue A and blue B.  Yes, that is a galaxy on end IMO.  No, you will never see that term in any EW text just like you will never see W3.  But you have to admit, W3 has been extremely powerful since I discovered it and GOE has been part of my analysis for years.  Look at Cyan 3 in the picture to left.  It too is W3.  I think that PLUG could POSSIBLY (odds and never certainties) bottom in the the $1.55 - $1.80 range and then turn up and just lose its freaking mind for the next 1-2 years all the way back up over $100.

Yes, I know that this sounds impossible today but in fact this bounced more than that on a percentage basis when it went from 12 cents to 11.70 recently.  So again, don't tell me it cannot possibly happen because it already did once.

I'm going to begin buying this soon, probably cost average my way into a couple thousand bucks worth.  I'll treat it as a non-expiring call.  Time will tell of course but win or lose know this: this is not a random call.  This was thought through and modeled with a respectable gambling odds calculation system called Elliott Waves.  If I lose on this it will not be due to stupidity.  And if I win it will not be due to blind luck.  Also, "losing" will not mean "rode it down to zero".  It will mean "lost 10-20% before the loose stops kicked in".  I like these risk/reward odds.