NEW YORK (TheStreet) -- Don't misunderstand. We are not saying buy, but we believe the damage is done and shorts should cover and take the rest of the week off. We're talking about Volkswagen (VLKAY) ,of course.

On September 21, we started our day with a story about Volkswagen and how it could fall to 120 euros.

Image placeholder title

In this long-term log chart of Volkswagen expressed in euros, above, we can see that a five-and-a-half year uptrend was broken and prices overshot to the 100 euro area in dramatic fashion. The headlines keep coming.

Image placeholder title

This chart, above, of the ADR of Volkswagen is in dollars. The chart shows a "can't miss it" double-top pattern from the $50-$55 area. To get a price objective from a double-top pattern, chartists the past 100 years have taken the height of the pattern and projected it downwards. The height is measured from the trough, $37, between the two peaks to an imaginary line drawn between the peaks, $52. Subtracting $15 from $37 gives us $25 as a downside objective. We're there!

Over the years we have found that price targets can be ignored as the market does whatever it wants to do, but we believe the damage to Volkswagen is done and shorts should book their profits and go on a short holiday. We are not saying you should look to buy Volkswagen -- a buy recommendation would require that signs of a base were developing and that is definitely not the case. Auf Wiedersehen!