WPT, Westport Innovations Inc.

Now more than 40 years ago it was fairly normal  to power your vehicle with natural gas. For the price of a few hundred marks, guilders or francs you could buy a conversion kit that would allow your diesel/gasoline vehicle to, also, run on compressed natural gas just by flipping a switch on the dashboard (while driving!). For some reason, that I do not understand, this rather basic technology has not found its way across the pond (perhaps for the same reason that diesel powered cars are non-existent here whereas they constitute almost 45% of all cars in Europe). Now with gas so high and natural gas so low one would think that the light is about to go on, perhaps not with the public in general but with commercial fleet operators. The savings are truly eye-popping.

Westport, together with the likes of Cummings and many car and truck makers, is one of the main innovators in this field. Innovation in this context is a little bit of a misnomer as the technology is proven over and over again. Here is the chart:

wpt b may 9 2012

Back when tech. was king, this stock tried to get to $100 and then dropped to – my guess – $2 in early 2006. I have no idea how to count this, suffice it to say that it could have been a rebound and from here on the stock is ready to dive into the ground. Alternatively we are in a wave 4 (that does not alternate with wave 2) or, and, this may be the most plausible count, we completed a sequence of 5 waves in a new bull market and are presently doing wave 2. All these possibilities are shown in the next two, more detailed charts;

wpt may 9 m 2012wpt may 9 s 2012

In the most detailed chart the stock dropped today precisely to the lowest point in the top triangle. It had a very volatile day as it briefly almost touched $24. This has been straight down from $50. At todays low it is sitting right on the lower long-term trend line. If the stock is in a new bull it should not trade below $22.5 (overlap).  If we are in a bear market a B-wave should develop soon. In that event a rebound of about $8 , to $31 now but a lower level if the stock goes lower first , is pretty common. The long and short of it is that this stock should on the basis of probabilities , be a buy here and certainly if it goes lower.

Note that the RSI and MACD are already heralding a turn. Ask your broker for the fundamentals!