Technical Analysis - ADEX
Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.
ADE Corp (ADEX:NYSE) is forming a multi-month triangle pattern that looks like it could soon resolve itself in a final 5th wave thrust above the October 2003 highs before a major correction starts at higher levels. The technical evidence suggests that the sideways triangle pattern that has been forming for the last 6+ months is a 4th wave correction within a larger impulse wave that started from the October 2002 lows.
I have noted in the past that triangle patterns are typically present in 4th wave positions, as they are usually the next-to-last wave form in a larger pattern. In this case, this 4th wave corrective triangle from October 2003 is the final corrective pattern before a quick upward thrust could take prices perhaps 50%+ higher in a 5th wave to $26-28.
If this 4th wave triangle interpretation is wrong, then the triangle pattern that is forming should resolve itself with one move down-up sequence for the stock, where it could fail somewhere between $21 and $22 and then fall rapidly below $15. That immediately bearish interpretation, however, remains the lower probability. The Demark, momentum, Elliott wave, and Fibonacci indicators suggest that one more push to new highs for this stock in the $26-$28 area is possible in the next few months. Either way, the triangle pattern playing could allow for substantial movement from a thrust out of this triangle up or down in the next several weeks.
The very near term suggest prices could fall toward the $16.75-$17.75 area in a final E wave over the next 1-3 weeks and then could bounce hard from that support level and move rapidly (as 5th wave thrusts from triangles do) toward $26-$28. If prices stall in the $21-22 area from that $16.75-17.75 support level, then the bearish interpretation is operative and I would expect a rapid fall below $15. In either case, the analysis suggests that in the near term, should ADEX move down to $16.75-$17.75, it could begin an uptrend unless it breaks down through $16 ($16 was the wave C low). I will then reassess at $21-22 level to determine if much higher targets are in the cards, or if another large move down is imminent
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