Saturday, February 11, 2017

Are fundamentals really the way to make money in the stock market? [PLUG]

After having written nothing about Plug Power for nearly a full year since this Feb 2016 post, I came out of hibernation just about a week ago on this stock on Sunday Feb 5th 2017 with the model below and the following commentary, "The chart has taken on that bent over fishing pole look that is often a precursor to a rapid snap back that, in aggregate, I refer to as a unicorn tail...I think it could have more to go but when it bottoms it should be a rapid finish with rapid recovery...After it bottoms, and that should be this coming week, I expect a minimum bounce up to $1.30 but it would not surprise me to see it go as high as $3 either.  If it doesn't find support at the current level then it should do so at 85 cents which would be the gap fill." (highlight added).

Current actual shows that the gap was exactly filled and then the shares skyrocketed from 83 cents to $1.25 on Friday.  The percentages are quite significant to say the least but only if you had some order based mechanism to indicate when a LIKELY buy point would take place.

Is it really just another coincidence that this bottomed at exactly the 85 cent price level that I indicated would be LIKELY support?  Really?  After 1 full year of me following this stock but writing nothing, I pop up back on the RADAR, predict almost the exact bottom and it's a coincidence?  Well the engineer in me says "unlikely to be a coincidence" especially when I have done this similar kind of thing so many times, including just recently in this post on Sears.

Face it folks, the Elliott wave principle is a real thing and its quite powerful at increasing your odds of winning in the casino we call the stock market where nobody really has any idea of the fundamental value of any of these paper assets because the paper underlying them (the dollar) itself has no fundamental value.  So all of these moves are based on herding instinct which is why, when the historical charts are run through the filter/decoder ring known as the Elliott wave principle, they reveal with good odds what the herd is LIKELY to do next.  There are no certainties of course.  But to say that nobody has any clue of what will LIKELY happen next based on the charts alone has to be viewed as just a bit thick headed at this point.


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