A year ago this stock looked like a buy at around $2.50. It proves the point that just because a stock has lost 90% of it’s value, it does not mean that it cannot lose another 70%. In any event the entire drop from the highs of about $25 now looks a lot like a double zig-zag in which the second a-b-c travels the same distance as the first. The spurt up from the lows looks pretty impulsive so the next serious target is around $4.50/$5 where the e wave is.
As we mentioned earlier this stock cannot go bust. It is the only Canadian company that manufactures a recognizable product, furthermore because of it’s anchor in the French culture of Quebec letting it go is tantamount to splitting the country in two. It is simple not going to happen. There is already 1 bln. set aside to help it out and there is always more where that came from. A buy for now, but short-term the stock is a little overbought.