BNS Bank of Nova Scotia

bns sept 27 2012

The Bank of NS is a great bank that must have studied EW it conforms so nicely. Look at the big black line, the RSI and the MACD, none of which has anything to do with EW but paints a very negative picture in its own right.

The wave structure is that if a 1-2, 1-2 starting, presumable, wave C down. The two retracements are , roughly , similar in size, give or take 70 % calculated simple by counting the blocks. The only fly in the ointment is the 5th wave in the second, smaller, impulse wave down. I assume it was a failure. There are a good number of alternative interpretations. For instance W2 may not have been complete so the stock could rise to $59 or so and then fall. For the moment we will assume that wave 3 of C is about to start. See below.

bns b sept 26 2012

DELL update

DELL sept 27 2012

It is almost a month ago that we last commented on Dell. We commented that this is a buy no matter what but that it would probable drop another 50 cents or so to get to the bottom trend-line. Well it took a month but here we are, yesterday’s low was at $9.78, pretty well right on that line. To this we add our “keep-the-gap-in-the-middle” theory and voila, we have a perfect 5 wave sequence. Furthermore the RSI is not confirming the new low and the MACD is almost shouting from the rooftops that we went too far. The odds are exceptionally good that at the very least a rebound should start any moment now. If it does a first and minimum target is $12.50, a handsome 25% and well worth the trade (unless you are working with full brokerage, in which case you could lose half of it to your broker for filling your order). The P/E is at about 5.8 . See also previous blogs.

For perfect clarity a buy now to a target of $12.50 does not imply a bullish stance for the long term. For all we know computers may go the way of the Do-Do bird and Dell with it, but not before this stock rebounds to at least $12.5.

WLT, Walter Industries, update

wlt jul 2012 swlt sept 2012

The usual then (July) and now. I am not at all sure there actually was a bona fide triangle but in any event, it worked. The stock hit a low of about $32 the other day completing (?) a 5-wave sequence down. Normal rebound levels would be $70, $80 and even $90 as the top of the triangle.Of course the question is , can it go lower?

wlt b sept 2012

Yes it can, but by some measures it may have gone too far already. Worth discussing with your broker?

WPT update

wpt sept 27 2012

Sometimes EW simple doesn’t cut it. Straight lines become more reliable. There is a very good chance this stock will not cross the line in which case it will easily rebound half the drop from $40, that is $7, give or take (about 25% on $26). Both the RSI and MACD seem to support this notion. In case it does break put in a stop at $25 or a wee bit lower. It is a risk/reward of 1 to 7, quite acceptable. And , on top of that China is doing a little more easing today and they could use a few cleaner burning diesel engines.