SWHC has been on the trading radar with previous analysis in early November. Smith & Wesson could follow through on big upside targets set for long term holders if the current move doesn’t get cut short. Today, SWHC broke through its prior resistance level of 4.00 and has so far traded to 4.19. SWHC has earnings being released this coming Wednesday December 8 according to reports.
Short term trading for SWHC appears to be developing for two upside targets. The first is 4.32, the second 4.83. These are wave 3 and wave 5 respectively of a parent wave.
The current 4.19 high could be an internal wave 3 of wave 3 to the 4.32 price target. The projected price was 4.17. Trading could pullback to 4.07 – 3.97 before trading higher. A 4.09 price level has been reached on the pullback so far today.
Looking at a daily chart, there are two scenario wave counts for the 4.32 price target to take effect. First, is from a parent wave 1 count from 3.53 on 9/10/10 to 3.75 on 9/14/10. This calculated wave 1 will result in a completed 5 wave sequence at the 4.32 price target.
Within the daily chart again, from the wave 2 low of the prior wave 1 explained above, a second scenario for the same price target develops. From 3.53 on 9/30/10, a successful wave 2 retest, to 3.63 the following day is the internal wave 1 magnitude. Also the following day, a successful retest of 3.53 as an internal wave 1 of wave 3. This internal wave 1 reaches the 4.32 price projection as a wave 3 target. Its wave 5 target being 4.83.
