This is my current chart. In the absence of another signing, I...

This is my current chart. In the absence of another signing, I am predicting it will retrace to around 360, but that should be it for a while.

The path has so far followed almost exactly my chart forecast done after the announcement with a couple of significant exceptions. I did not originally project 2 five waves cycles, but I did project 443 as the end point (obviously it went higher to 458. When the first cycle finished I expected a larger retrace, but the second cycle started quickly and that gave the unusual pattern of the wave 5 = wave 3 on the second cycle. I had wave 5 predicted after wave 4 of the second cycle, as wave 5's are tricky to get right earlier than that. The retrace was different from my predicted retrace, in that I originally had the second cycle retrace shallower than this, but after the A wave the retrace was redrawn to essentially this, but with a much tighter time line and a cleaner B wave. The post wave 5 correction is normally a 5-3-5 pattern, so there should be one more down wave on the C wave which should take it to the 360 target. The arrows are calculated as the length of the first A wave, and then wave 1 of the C wave. Both are agreeing so that increases the likelihood of the target. These two waves together make a super wave 3, so there is another big leg up to come, probably triggered by the next announcement of a signing. It is interesting that the retrace has retraced both 5 wave rising cycles and seems to be targeting the first cycles support channel, with the A wave ending at the bottom of the second cycles support channel and the C wave looks to be ending at the bottom of the first cycle's support channel. I would guess that a re-entry point between 360 and 380 is probably the reasonable course of action. A drop below 347 would be a problem on this chart as it would void the entire cycle pattern, and a drop below 360 would be very "iffy". I would treat either as a danger signal, but I am not expecting that to occur.

The lack of financial impact projection in the announcement leaves the retrace behaviour less constrained than otherwise, but the same factor probably helps drive the rise higher (unless the financial impact projection was blow-me-down-good. I consider this double cycle pattern very unusual, and offer no opinion at this point about whether it is likely to repeat next time, but If I recall correctly, I think a deep retrace on W3 is meant to imply a shallow retrace on W5, so the next cycle's retrace may not be as severe.

Clearly WBT must deliver another signing within a few weeks however or the chart will become stale.



Note I am not holding currently (for obvious reasons), but expect to be doing so again in the near future. Expect significant volatility when (and if) WBT announces financial impact data of the signing(s) or when the first qtr report is released after the signings - so next year circa March. It is likely the market will over estimate the revenue stream from the early signings, I believe, and be "shocked" when the actual numbers materialise. Given it is likely to be a slow ramp-up, and some discounting was done to get the first signing or two, the odds are for a downward adjustment (which will, of course, also be wrong because the first signing factors will not be reflective of the position a year or two out). In short I expect considerable volatility going forward for the next 6 months at least. Of course this depends a bit on which foundries sign up and how many. It is likely, I believe, that after the first 3 or so, there will be a bit of a rush among the others, but that assumes that at least some of those already signed are making actual chips/have orders with it and probably that they have successfully scaled it down below 130nm in production. Either way, it is a pretty good TA position to be in in my opinion, and the retrace is of no concern since it has hit text-book targets.