The usual then, Sept. 4, 2015, and now charts;
Generally speaking we have been bearish on the Canadian banks, but occasionally we have nevertheless shown the bullish side as well. Last September we did just that with the Royal Bank by pointing out that the ups and downs of the past year or so might just be part of a large corrective structure despite the fact that the stock could not break out to new highs for about eighteen months. New highs just did not seem to be right but here we are.
So now, with the benefit of hindsight, we have to assume that the analysis back in Sept. was correct. That must have been the elongated a-b-c wave 4 followed by, what certainly looks a lot like a wedge. These normally retrace in full so once wave 5 is done, which could be any moment now, we drop back down to $64 and perhaps a lot lower this time. There is still a little room for a throw-over but the technical indicators are already screaming sell. Particularly the RSI is always very accurate as a timing tool and it needs just a little push up to get overbought. We would sell right here, right now.
Note that the b wave within the larger B wave moves one step to the right making the whole correction about 5 or 6 months longer than first anticipated. I do not have an explanation for why the stock was trading at about $81 in Dec. 2015 and only at $79 in today’s chart. In fact, looking at a G & M chart the high at that time was more like $83.33. To then make a new high we would need more that just a dollar more!