If It Looks Like a Bubble, It Probably Is a Bubble

The Manitowoc Company (MTX), a manufacturer of cranes, food-service equipment and marine products, is a cyclical company. From 1996 through 2003 the stock price exhibited an orderly repeating cyclical pattern. But the current price cycle has the distinct characteristics of a price bubble. The upside started in early 2003 at a gradual rate, jumped to an unsustainable rate in early 2006, made a significant correction and again turned to the upside at an unsustainable rate.

The MTW chart is reminiscent of the price charts of many technology companies in 1999 and early 2000. Ultimately these stocks crashed. Avoid MTW at these prices levels.

Related Articles:

Anatomy of a Bubble Top
Price Patterns - A Bubble Top is an Extreme Pattern
Will Technology Stocks Return to 1999 - 2000 Bubble Highs?

Posted December 13, 2006.