Downside Targets for Craft Brew Alliance

The latest run for Craft Brew Alliance (BREW) from the low set in November 2015 to the most recent peak on August 2016 requires that we check for the downside targets.

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 A parabolic peak is one thing.  However, having them play out in a consistent fashion is something else.  In the case of BREW, we’ve had two prior parabolic peaks since 2008 that were true to form and function.  In the period from the 2008 low to the 2010 peak, BREW declined to below the mid-range Speed Resistance Line [SRL].  In the period from the 2008 low to the 2013 peak, BREW declined below the extreme downside target.  In the chart above, we have the following downside targets:

  • conservative: $12.57
  • mid-range: $10.02
  • extreme: $7.47

Although there is no assurance that the stock needs to decline to the referenced downside targets, any parabolic move must be watch closely as entropy will kick in at some point.  In this case, we believe that the ascending conservative target is a lock.  With established history as an indication, the mid-range target looks to be a safe “bet” as well.  We’ll check back in on this as more time has passed.

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