Saturday, June 27, 2009
An Elliott Wave In QCOR
I first noticed QCOR back in September 2008 when it showed up for several weeks as the top relative strength stock in the Russell 3000. As market conditions improved, it fell out of the top spot, but I have a hunch that QCOR may be under stealth accumulation, and I have been slowly building a long term position. If QCOR breaks out to new all time highs, it will likely move up dramatically to 25 and possibly higher.
The recent low in May may mark the completion of a large 2nd wave flat correction (not shown). Since then QCOR has traced out a nearly perfect impulse wave with 5 clear non-overlapping waves, a flat correction and a triangle. Wave 3 also clearly subdivides into 5 non-overlapping waves. This may be the beginning of a powerful 3rd wave. If so, the critical level is the May low, which must not be breached. After the current 5th wave is complete, we would expect a 50% to 61.8% correction of the move up from the May low, which would provide a low-risk entry point to initiate a new position or add to an existing position.
Given that waves (1) and (2) took almost two years to complete, wave (3) may take one to three years or longer, so this definitely has the potential to be a long term position with significant upside potential. Intermediate term traders can simply trade for the next rally after a correction, which may approach the all-time high around 10.
Please do your homework before entering a trade, and as always, use appropriate position sizing and risk management.
Posted by R. Craig Pritchard at 10:56 AM