To All,
A declining 5 wave price pattern has been completed as of today. In Elliott Wave terms, LCAV has completed 5 waves of a primary degree as follows:
[Note that in this analysis, the 5 waves of the bull trend are expressed numeric characters (1-5), and the 5 waves of the bear channel are expressed in alpha characters (a-e) (for explanation see Elliott Wave Principle by Frost and Prechter, pub. by "New Classics Library")].
1. Wave 5 of a primary degree culminated with a price high of $8.50 on 4/28/97.
2. Wave a (subsequent declining price low) occured on 4/30/97 at a price of $5 5/8.
3. Wave b terminated at a price high of $6.25 on 5/1/97. Fibonacci prediction for wave b, based on the wave 5 to wave a (using the "golden ratio" of 0.618) was predicted to be $7.40/share in 3 days (5/1/97) from wave 5. However, the price high for wave b was only $6.25. This 22% retracement (upward price recovery) effectively establishes the Inherent Ratio (IR) for the price pattern for subsequent price projections.
In other words, if the ratio of the retracement had of been $7.40, 0.618 fibonacci predictions would result. Therefore, the following projections are based on the Inherent Ratio (IR) of 0.22, rather than 0.618.
It is important to note that when the retracemnt from a price high to the next price of lessor value in a declining price trend (i.e. high lower than the previous high), is less than 50% a price trend reversal can be expected. This downward price trend can be rather severe with an expected 5 wave down move rather than the 3 wave correction for a retracement of 50% or greater.
4. Wave c was projected in 8 days from wave 5. Using the IR of 0.22, wave c of $5.00 was predicted for (8th day). This price was achieved on the date 5/6/97 projected.
5. Wave d was projected to be $5.14, on 5/8/97 wave d moved to a price high of $5.50, well within the range of acceptability.
6. The final 5th wave of primary degree occurred on 5/14/97, 12 days as predicted at a price of $4 7/8 (as of 12:45 PM EST).
What does all of this mean to the future price movement of LCAV? Time will tell, but from this notable weak price pattern shows the lack of investor support for LCAV.
Any upward price movement expected as a result of the previously referenced "Zacks Hot Stock News release", is not evident in recent price activity. In short I wouldn't buy the stock as time until the momentum and OBV indicators show increased buying activity. Also consider the fact that most stocks in the Eximer Eye Care category are at their price lows, showing lack of interest for group.
Any price improvement from this level is not expected to go above $5.50. Will continue to advise on this issue until May 21. I will be away from this thread from 5/22 to 6/4.
Would appreciate comments from those who follow this stock and whether or not this exercise has been helpful.
Regards,
Harry |
