EMP.a Empire Co. or Sobeys

EMP.a aug 2011

A year ago I thought I had this one nailed down. Since then it has not budged, never exceeding the $60 level. EW is not very helpful in terms of timing.

Looking at it again , I am even more convinced that this one is going into the tank. The 5-waves up are clear even if different little variations from what is shown in the chart could apply. But the outcome is perfectly clear. Either the irregular B-wave that took the stock slightly above the top is correct, and the subsequent moves are a 1-2. Or the top was not in yet and we have been doing a wedge for the past 5 years, see details below;

emp.a aug 2011 d

Personally I favor the idea that the top is already in and that we are in wave 3 down. In practice it does not matter much as it is practically certain that it will not trade above $62 and soon (a year or two) it should trade at about $34. If nothing else writing a few call options with a strike above $62 and a reasonable time to maturity should be very productive.

See also Colgate CL which is in a virtual identical position.