Zoltek Companies Inc. (ZOLT)
(6/27/07)

We're hoping to get a bolt from ZOLT, which is tracing out a tradable diagonal triangle pattern that should be offering some short-term upside.

The diagonal triangle wave count as labeled appears to work best for the model with respect to the Fibonacci relationships, and if correct, then the trade would be based on a zigzag rally to complete Wave 5.  Both the diagonal triangle, and the larger (A)(B)(C) pattern of which it is a part, target resolution at the 49-50 area.  There is some resistance at 45, where the stock stumbled on June 18.  The pullback was corrective, and the breakout pattern on June 27 suggests the earlier high should be challenged.  If removed, which it should be to resolve both the near and intermediate term wave patterns, then it would open the door to 49-50.  The 50 area is also the 78.6% retracement of the stock's bear market decline from 1997.  A break of 42.50 clears some immediate overhead resistance.  39 was the June 25 low, also a support level, and you may want to put a protective stop a few ticks below.

As an option play, the December 2007 $45 Call (symbol LVQLI), is currently selling for $4.40 with a nice Delta of 0.51.  

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