This is the comment I made to my subscribers yesterday:
Like I have stated here these past few days, it does look like ELON is about ready to break the downtrend.
Over the past 9 months the stock has been building a very powerful support/bottom level and now that bottom is chart complete.
It can be said the bottom has multiple lows but if you use a magnifying glass it can actually be said that there is a very clear inverted Head & Shoulders formation built with the left shoulder being the low seen on November 16th at 2.10, the head being a double bottom using the lows made on 4/18 and 4/24 at 2.07 and the right shoulder being the low seen on June 27th at 2.10.
The necklines would be the line drawn from the high seen November 30th at 3.10 and the high seen on June 12th at 2.73.
The objective of the flag if broken would be 3.35.
What makes this situation even more compelling is that the 200-day MA, currently at 2.58, has not been broken for 2 years and breaking of that line will mean the downtrend is over and that will bring a short-covering rally of consequence that could "ultimately" take the stock up to the 200-week MA, currently at 6.75, or at least to the Feb2012 high at 6.34.
If you consider the fact that the stock from 2001 and 2007 traded between $6 and $32 and then from 2008 to 2011 traded between $5 and $15, a rally up to either of those lows ($5 or $6) would still keep the stock in a long-term downtrend but is "easily" achievable as a retest of what was previously long-term support, it can be said with some confidence that a break of the 200-day MA could generate the stock to double in price.
In addition, I don't follow the fundamentals too closely but I do know that the company produces what is called a "smart meter" that is in demand and to my knowledge does not have any competitors of consequence in the industry, suggesting that fundamentally, this company should "not" be down at these price levels, given the fact that the stock has traded down to the lows the stock first saw when it started trading in 1999. Considering that the stock rallied up to $113 in the year 2000 and that the overall market is into new all-time highs, this is a stock that having built this kind of a strong bottom could be the "steal of the century" out there.
It has "all" been blood, sweat, and tears in this stock for the past 29 months since I bought the positions I have right now up at the $8.80 level, but it could now start being an interesting stock to trade and one that could payoff. I will add some positions soon.
ELON got up to the 200-day MA today, currently at 2.58, and the important thing is that it did not sell off. The previous time the 200-day MA was tested was on June 12th and the stock sold off 30 points intra-day from the highs. No such selling was seen today, suggesting that the bears are losing their power to push down. I would venture to say that sometime in the next week or less that the line will be broken. It should be mentioned that the high weekly close for the last 4 months has been 2.49 and if the stock closes above that level tomorrow it will likely stimulate more buying interest.
..nice analysis..to be clear on fundamentals rather than technicals..Echelon has plenty of global competition and is a smaller but prominent player in industry with global standards for it's LONworks business end as well as smartmeters. Next year or two should by all known facts bring significant upside to stock.