EMP.A Empire Company

They just reported today and are down by almost 1/2. Under new economics 101 this is no doubt something to applaud and therefore the stock will go up. Old fashioned EW analysis suggest the stock has peaked and a huge drop is right around the corner and long overdue. Here is the chart;

Empire Co.diagonal

The 5th wave in this sequence is a “diagonal”.  It is the only structure that can have overlap and most often does. It is always a 5th wave (or C) and occurs at the end of the ride. In English it is a rising flag, pennant and half a dozen other things. I have put the model next to it so you can draw your own conclusion. Just a hint here, normally these this fall back to at least the base, here at $35. After that 50/62% or whatever else could follow.

See also my previous blog of August 5th 2011 where this stock was predicted to go to about $62 and then fall. It did a few extra dollars but the may point was dead on, so far at least.