Mobile Mini, Inc. (MINI)
(4/2/07)

In looking at the long-term wave pattern for MINI, there is the indication that it did not top last May, when it achieved an intraday high of 37.12.  The decline pattern has been sideways, suggesting a triangle, and sentiment has gotten pretty bearish.  The current Put/Call ratio in the stock is over 1.40, and recently reported short interest shows it would take 15 days to cover all outstanding short positions, which is excessive, and could drive the stock in a recovery by itself.

As the chart for MINI suggests, we're counting the decline pattern as a Wave (4) triangle.  This interpretation is strengthened by the fact that Waves B and D of the triangle are related by 62%, following the Elliott Wave guideline that, commonly speaking, at least two legs in a triangle will be so related (78.6% is also common).  Another sign is that the bounce from its 25.12 low of March 9 was an impulse pattern.  If we're correct that the pattern now developing is Wave (5), it would indicate at least a retest of the 37.12 high, and possible new high at around 39.  In the event that the decline were incomplete, there's still evidence that a tradable recovery is likely, though obviously the upside targets would be more modest, with highs at the 31-32 area perhaps more probable in that scenario.  The stock pulled back from some 23.6% Fibonacci resistance when it reached a high of 27.90 on March 21, and there's another layer of Fibo resistance lies at the 29.70 level.  If you wanted to be ultra conservative, you could wait for the stock to get above 30, but would obviously loose some positioning.  Otherwise, a move above 27.95 can be used.  The best support for the stock right now is the 25.12 low, and a stop can be set just below.  

Our suggested option play is the November 2007 $30 Call (symbol UACKF), currently selling for $2.10 with a decent Delta of 0.47.  

©Copyright 2007 Tony Carrion.  All content presented is the exclusive property of Market Harmonics. com, which is owned & operated by T. Carrion & Co., LLC, and may not be duplicated or distributed without the express written consent of the author.