Westport Innovations, WPRT, a leader in the development and implementation of natural gas vehicles has been experiencing accumulation over the past few months. How can we find accumulation? I look for it when stocks absorb bad news and hold ground under pressure. Another way to look for it is to view selling pressure and see how it changes over time and how it impacts the price. What we are seeing here in WPRT is that more selling pressure has failed to lead to lower stock prices.
I view $36-$37 as reasonable upside potential over the next few months and I view risk as $26.40 on the downside.
With WPRT at $29.48, this provides us with $3 downside and $6.50 to $7.50 upside potential.
Best regards,
Tim West 4/11/2013 at 11:17AM EST
Comments
timwest
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Raise the stop just a touch to 28 from 26.4. Now the risk from entry at $29.48 is $1.50 with 4-5 times that in upside potential.
timwest
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Fortunately I didn't take my own advice here and I stayed in WPRT. It sure was the bottom of the correction when it dipped under 28. However, if you get stopped out of a position, it is wise to have a re-entry strategy, particularly if the fundamental story behind the stock (and if the market conditions warrant). WPRT recovered to a 5-day high after dipping under 28 and provided a simple re-entry technique. I think WPRT is worth examining a little closer now that it has moved out of the base area and because the rally in crude oil is a leading indicator for shifts towards market psychology leaning towards gasoline engine competitors. Perhaps a way to trade WPRT here is to buy on re-newed strength above 34/SH and use a $30-$31 stop. Upside potential is upper $30's.
timwest
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WPRT is looking exceptionally solid here today & yesterday. The bigger the base, the bigger the move UP. This WPRT has a very strong base. Add to positions now that this setup appears even better than before.
5/30/2013 at 1:25PM EST
littleriver
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timwest
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I like the boxes you have drawn but not sure exactly how you decided to draw them. Accumulation can take so many different shapes and forms. Time and volume and price form such unlimited patterns. Thanks for the comments.
littleriver
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Glad you liked the chart. The answer to your question is a work in progress. I have no hard rules. I am new to cloning and this chart is more practice than a polished proof. I was introduced to cloning by fellow member nmike and I am learning to apply it the technique in a variety of ways. When I viewed WPRT's chart, I asked myself if cloning could have been used to predict the timing of the breakout. The blue box is a clone of the red one. For the red reference box, I highlight what I felt was the beginning of the inverted head and shoulders to the middle point. Then, copied this box to produce the blue clone. I have further divided the red box in half and produced several blue clones in this chart. The clones make many hits. I added one to grow on. Let's see how it does. Best I can tell, the 17th of June should be a big day.
littleriver
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I had forgotten about this one Tim. Thanks for the reminder. I made a chart a couple of months ago that went really well . Though, I left wanting more. Maybe this time. One has to be mindful when nearing the target too. Those turns are brutal. Reminds me of an olympic swimmer nearing the wall. If you blink you'll miss it.