This company makes medical instruments which it sells all over the world. This is a model 5+ year “flat” correction that has the 3-3-5 signature. It is moderately bearish and consequently the first leg down is a 3 wave structure instead of the 5 wave structure that you would find in the zig-zag. But about 50% down is no fun, particularly not if you do it twice in a row. Target is about $55 and then some and is highly reliable.
Ford is different from the others in that it is already in a new bull market without having gone into bankruptcy, even if it did trade below $1. We liked the stock then (see 21 previous blogs) but are not sure lately.
If this is a correction of the move from $1 to $19 it should take the form of a zig-zag, or a double zig-zag. One single zig-zag was complete at the $9 low, however the next move is an a-b-c again suggesting the trend is still down. If so the first leg of that second zig-zag may be complete. If so a rebound to , say, $12 is possible and then another leg (c) . The second zig-zag could end up being about 62% of the first. This is not similar to, but does rhyme with NAV and GM. The RSI and MACD suggest this might be a realistic possibility. In one of the previous blogs I calculated that $7.84 represented a 61.8% retracement of the entire move.By sheer coincidence that also happens to be where the lower neckline of a possible H&S formation runs, for whatever that is worth. When in doubt,only use other-peoples-money, not your own.
The H&S target would be around $4.
Click on the left blog to enlarge. In reality it did stop at about $19 and did bounce about $10 ($9 to be exact), and it did prove to be a 4th wave. The whole thing does not channel particularly well but that may be due to the authorities randomly throwing in a QE2 or the twist or whatever. Presently, as with NAV, it looks like we are starting the 4th wave of 5 of C. A plausible target would be about $16 but one has to be careful not to hop on the bandwagon too early as so called extensions can ruin the fun real quickly.
Back in August of last year it looked like NAV was going to do a triangle (it was definitely a 4th wave), instead it did a zig-zag but the implications are the same, that is the stock will go down in a 5th wave and that is what it is doing. The whole structure is looking to become a 3/4 year “flat”, that is a sideways move that fits in a parallelogram, more or less, as the C leg is known to dive a little deeper. In detail;
An ideal target would be around $10. We are presently in wave 4 of 5 of C.