Performance Review
On June 21, 2016, we provided downside targets for WD-40 Co. (WDFC) based on the work of Edson Gould. At the time, we said the following of the stock:
“The assumption by many momentum investors is that WDFC will continue to rise further. However, prior experience suggests that a parabolic rises usually end in a breakdown in the price.”
Since the 2016 posting, three weeks later, WDFC managed to increased from $114 to $122 on a closing basis. However, since the July 11, 2016 high, the price of WDFC has meandered as low as $110. Considering that the stock is putting up so much resistance to decline after a clear parabolic peak, there may be more life in this stock than we thought.
From a standpoint of investment safety, WDFC would be an ideal consideration at or near the $72.49 conservative downside target as indicated in the chart below.
