Monday, May 23, 2011

KKD Explodes 25.78% Higher

KKD reported earnings this morning that beat estimates by 4c and double that of a year ago on higher than estimated revenue as well.  My personal opinion is that the KKD has rallied in a series of first and second waves since it bottomed in February 2009 and is now beginning a powerful 3rd wave advance that should carry it to at least 26.42, the February 2003 low.  However, there is resistance ahead at 9.65 and 13.93.  If, and it is a big if, KKD can hurdle 26.42 over the next year or so, then I think it will retest if not exceed its all time high.  I have been a buyer of this stock from $1.50 and am now fully positioned to ride this trend.

The market continues to whipsaw traders, but while buyers are standing aside, selling volume has failed to materialize.  The most likely explanation is that the current decline is wave [c] of a 4th wave triangle with waves [d] and [e] yet to come.  The upside target would be at least 1431+/- and probably higher.  Unfortunately, there is no way to know if this really is a 4th wave or wave [X] of a complex double zigzag that targets even higher prices.  It may be the end of June before an upside breakout is seen.  Only a break of the March 2011 low would invalidate this viewpoint.

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