Climax Top for Cummins?

Is this a climax top for Cummins (CMI)? I have been following this stock for quite sometime now. And as you can see I was foolish not to invest in it on the long side. It has more than tripled in just about two years. Anyway, to be frank, I got it wrong. And if you have been following my writings in the past you I don't have to say anything more. There doesn't seem to be a place in this market for any bears. They are just getting crushed one by one. For now, though. We may be at an inflection and although I don't want to put a timeline we may have already begun that.

So the CMI chart amazes me. Especially in the last week or so went from about 70 something to a high of about 107 something today. That is a return in excess of 50% in less than 10 days. And not that shares were languishing for years and suddenly went ahead. Even before the stock started this runup around 70ish was up almost 16% for the year. That is a staggering 62%+ return ytd.

But just look at the last few days of trading (from April 23rd to be pricise). Look at the tremendous surge in volume. Especially Monday, Tuesday and today on Friday. I feel the stock shows the signs of a climax top. What that would mean is the stock would not see the 107 for years to come and soon start it's journey back to earth. Now that is just a guess. There is a possibility that it can come back up and keep it's uptrend intact. But looking at the precipitious volume on what it has rocketed up tells me that we may be at a top.

What do the fundamentals for CMI tell us? Maybe they are sparkling. Company has beaten and upped guidance much higher than even what analysts were expecting. But then don't all the companies who are at the top shine fundamentally? That is the reason why they are there in the first place. So keeping the optimism one could definitely argue if this is the top or the begining. It would be interesting to watch. And I will be doing just that.

Full disclosure: I do not own CMI nor am I short the stock.