Whereas some stocks have done very little over the past 10+ years, that is certainly not the case with Crescent Point which has gone from under $2 to above $46. We would sell it now. Veritas has a $50 target on it but we doubt that it will go much above $48 given the above “wedge”. The extra dollar or two is not worth waiting for considering the downside risk this sort of pattern usually entails.
Comments from July and October last year, see previous blogs.
The stock did exactly that. The low was at $33.54. My (educated) guess is that the first wave is complete and that we are doing 2 right now. This wave 2 could, repeat could, continue to say $44, the apex of a triangle. I am sure some of you will think that this count cannot be correct as wave 3 looks to be the shortest. However if you look carefully it will become clear that it is indeed the longest. Stay out! By the way, the p/e is still well above 30 according to Bigcharts.
The target of “say” $44, made 4 months earlier was , of course, wrong by $0.26. That really makes you wonder if EW works. Next is wave 3 down to below $25.
See previous blogs! We were wrong about wave 2 not going above $52, it did but at least we got the first target just about dead on at $40 or so. The move down is not entirely clear, it could be 5 waves but there is some overlap which should not be there. However the a-b-c back up, even if surprisingly strong is pretty clear. Today we are doing the 3rd of 3 (or alternatively a second a-b-c down). The crime today seems to be accounting irregularities, cozy relations with a former political friend and a lot of “baksheesh” that is pretty rampant as soon as you get below the Rhine, but that can be found here too as, for instance, at that Canadian ex-crown corporations like Orange.
These guys are building jails in Lybia, something that is presently in high demand with our present government that would like to see us follow the US example by having the largest percentage of the population behind bars. That is not going to stop this stock from reaching our ultimate target of below $26.
Richie Brothers, the auctioneers (RBA) have a similar chart except that wave 2 peaks at a more modest 60% or so retracement level (see previous blogs).
As we pointed out , the b wave here was a little bit at the low end of the scale but otherwise this was a screaming buy and certainly violent, almost a double in a month. This one should go higher to about $90+ but we would prefer to play it safe and exit at about $78 or so.
The Blackstone guys are buying 111 mln. subordinated shares at $18, which adds up to about 2 bln. equal to the company’s capitalization. This is seed money for an export terminal costing about $10 bln. to, you guessed it, export L (liquid) N(natural) G (gas), from the US that is presently not enjoying an abundance of the stuff to other parts of the world. Also there were some rumblings about using the fuel in existing internal combustion engines, as in diesel locomotives and normal cars, something that is pretty common in Europe. Here is the chart;
By the way, this stock , once upon a time, was worth more than $45. Two counts are possible. In blue, 5 waves up to a top of $13, then an A down and a (very nice) B up, C to fallow. In red, we are presently in the 5th wave up that is clearly a three wave affaire and consequently would have to be part of an “expanding diagonal triangle”. This would also be required to explain the overlap between 2 and 4, normally a no no. It does not matter which count is correct as in both cases the stock should drop back to about $3. We would sell at $18 or even lower (as in right now).
Back in August of 2009 (see previous blog) we recommended the purchase of Dell with a target well into the twenties. Today we would suggest selling the stock now and taking a 40%+ gain over roughly 18 months. The reason, in simple terms, is that the stock had a “thrust” up from a pattern that looks suspiciously like a triangle, moreover the thrust is pretty well equal to the mouth of the triangle and the top is reached perpendicularly above the apex. What more can you ask for. Thrusts, which are 5th or c waves are, almost without exception retraced right down to the lowest point of the triangle, about $13.50, so why stick around?
This is the Global DOW. It is the same chart in both pictures, but with a different emphasis. In the larger picture we have the A wave down followed by the B up. We are now in the C which should subdivide into 5, separate waves, wave 1 and 2 are (almost?) complete. The structures within the circles are essentially identical. Soon wave 3 down should start. The retracement on the rebound was about 60-70%, if we get the same proportion now this one should be as ripe as a rotting apple. Below is what the whole thing might look like once complete.
Fortunately there are alternatives. One would be that the B-wave is not yet complete. Another leg up to perhaps 2600 could kill a whole year but in the end the big dive would still happen. There are a number of other variations but overall the outlook is pretty dismal.
On the left the Oct 25, 2011 blog, and on the right the Feb. 25, 2012 picture. The e-wave turned out to be a little on the short side, which happens when the stock is in a hurry to get going, and then the C-wave , which was expected to go to $50 or so to keep proportionality with the A-wave, actually went beyond that and got all the way to $30. Needless to say, if you were short you would have bought back for 60+% gain, if you are still short buy it back now. The stock could easily go lower but the most recent rebound, from $30 to $50 is a clear (maybe, maybe not) 5-wave structure, followed by an a-b-c retracement to $35 (about 3/4!). The c leg could start any moment and take the stock up about $20 from here. But the count is not perfectly clear so one should leave it alone or work with a tight stop at $29 or even higher.
Either one of these trajectories is possible, which essentially means that what you lack in certainty must be compensated for by discipline, hence the stop-loss.
Subscribe here to receive email notification whenever a new post is created.
Loading...