SLE Sara Lee Corp. – the joy of eating.

Speaking of Malthus it occurred to me that there may well be companies that would benefit from qualitative food shortages. SLE is a well diversified food processing company that operates in more than 40 countries and sells just about everything under the sun and should be one that benefits. Here is the long term chart;

sle aug 2010 2

Note that from the TOP ( I assume) at a little over $31, the stock drops for well over a decade to around $7, that is roughly 77%, normally sufficient to qualify the move as a major correction! Without getting carried away by the niceties of EW, I will assume that that is it and from here the stock is in the next major bull phase. ( the simple fact that wave C travelled the same distance as A supports this view). By the way, even if we were not in a new bull market but still in a bear market , a reasonable target would still be $25 before you go lower. So assuming all this is correct what lies ahead for the shorter term ?

sle aug 2010

Short term the stock doubles from the low of just under $7 to $15.25 recently. I have put a count on this but fully acknowledge that it is just a wild guess. Even so wave 1 up of the new bull should just about be complete so the stock should drop by about 50% or even more. Then, at around $11 it should be a screaming buy. The stock can be shorted but not without a stop-loss at around $16.50, the upper trend line. The risk obviously is that wave 1 is not yet complete ( which conflicts with my overall market view) and that a move to the upper trend-line comes before the drop. Perhaps the right approach is to sell at $16.50 or buy at $11 or so. The upside is very good but as usual, no guarantees, talk to your broker first and hopefully he/she will know who Sara Lee is.