Category Archives: BREW

Craft Brew Alliance: Ebb and Flow

On September 1, 2016, Craft Brew Alliance was trading at $19.41, we said the following:

“…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.”

Since September 1, 2016, BREW declined as much as –38% to the $12 level on April 18, 2017, on an intraday basis.  On April 7, 2017, we said the following:

“We don’t necessarily believe it but here we are, with BREW at a price of $13.15 and well within the range of the conservative downside target set at $12.57”"…”

Since April 7, 2017, BREW has increased by as much as +46%.  Anyone contemplating a purchase of BREW, barring a takeover by another company, should consider the exceptional increase in 8 months as a warning to protects your profits.

Below we have charted the price action for BREW and suggest that if the 2016 peak is not exceeded then the April 2017 lows will be retested and possibly violated by as much as –24% or falling to as low as $9.31.

Craft Brew Alliance Meets Our Target

On September 1, 2016, we said the following of Craft Brew Alliance (BREW):

“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 [$12.57] is a lock.  With established history as an indication, the mid-range target [$10.02] looks to be a safe “bet” as well.  We’ll check back in on this as more time has passed.”

We don’t necessarily believe it but here we are, with BREW at a price of $13.15 and well within the range of the conservative downside target set at $12.57 as established in our piece dated September 1, 2016.

image

The September 1, 2016 article lays the groundwork for what a person interested in BREW should look for and expect.

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.

image

 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.