Fixed chart, second week in July, 2014. Monthly chart. On the monthly chart, it looks ready to break out. The last price is 40 cents, nicely down on the daily chart, somewhat up on the weekly chart. Anyway, it doesn't matter much. You can hold this with confidence until it reaches $4. Then you have to sell it. It'll take some months, no saying exactly how many, but a good chance it won't be too many.
Bottoms may look pointy on long term charts - there are several examples in this chart - but if you look at them in more detail, they're round. These are waves, and waves have round bottoms. First, prices go down, and then they become flat, and then they go up a little, and then they go up more. That's a bottom. Down, flat, up, then up more.
When prices start to move up from the flat part of a bottom, they form a pattern called a flag. First, it's a flag pole, the taller green bar in February 2014. Then prices fall again, but gradually, so that the price action looks like a flag, fluttering in the wind. I don't know, I don't know, but I think we should buy into flag type patterns, like this one.
The flag in this chart is relative to the action throughout 2012 and 2013. The whole ten year pattern describes a bottom just beginning to form. That bottom will be round, and also flat, and, if it becomes a complete bottom, in time, it will need to vibrate between $4 and 40 cents two or three more times. But, in the short term, relative to the flat bottom which is in place, and the hint or beginning of a longer term flat bottom, this stock is positioned to go to $4.
This flag - which is clearly visible, beginning in February 2014, is likely to be followed by another flag, so, a quick upward move, then more sideways motion. Where will that second flag pole top out? I'm saying, $1. And sideways action is downward action, so prices should then fall by 50%. Selling at $1 is probably a good plan, and then buying back at 50 cents, collecting a neat profit at the same time. But it will be somewhat tricky, and the overall trend is towards $4, so you could just ride out the smaller fluctuation, as prices work their way to 4. 4 might well be achieved within a year, so it's not that long a wait.
On the weekly chart, the 2014 flag looks less than fully developed. Fully developed flags have sideways action in them. A complete example can be seen in the action between September 2013 and February 2014. If we call that the 2013 flag, then I think the 2014 flag needs to dip below 30 cents two or three more times, and the last dip should extend sideways for a number of weeks. At that point, it will be time to buy, in the expectation of a quick rally to $1. That rally could go higher, and you could end up cursing me for telling you to sell at $1, when it quickly goes to $2 or $3, and we might be able to tell whether it is stopping at $1 or not, as the rally develops, but it will require a quick decision, and we'll need to watch it like a hawk.
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