CNEH Short Term Top Possible

I last posted about CNEH here. I think it may have put in a short term top at $3.24, and we may see some retracement to as low as 2.30 before another rally commences.

On the daily chart, I see a clear 5-wave up pattern. 5-waves up is followed by 3-waves down, so I am expecting a correction from here. There is always the possibility that an extended Wave-iii is forming, but the declining volume and lack of strength thru 3.10-3.20 tells me that this scenario is unlikely. Since Wave-v was shorter than Wave-i, a correction to the Wave-ii low is possible, around 2.20-2.30.

The 1-hr chart shows the waves more clearly. Wave5 was certainly weak and choppy, and formed MACD-divergence. The 50% retracement level coincides with the Wave-ii low, so I am looking at this areas for potential downside targets. I will consider buying some more if the decline is orderly and choppy, as I believe the fundamentals of this company are very strong.

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