CP, another update and revised count.

cp apr 15 2016

Looking at CP a little closer, it might be better to start the drop in early Oct. of 2015. If we do that it would imply that we are now in wave 4 and not already in wave 2. That is a change in degree that may, or may not, prove to be correct. In any event we should not have to wait very long.

Waves 2 and 4 in this labelling alternate nicely as 2 is an irregular flat and 4 a zig-zag. Right now we are pretty close to the 50% retracement of 3, or 1 and 3, and are essentially on the parallel upper trend line. At about $200 we will have overlap that would negate this count. So basically you have the potential of another $8 up against $52 ($192-$140) down as a minimum. These are already very attractive odds that may just get slightly better in the next few days. Note also that the RSI is now , for the first time in more than a year and a half, back in overbought territory. The 5th wave down should take anywhere between just a month or two or about six months. There are options on this stock.

If the other count, that is where this is a wave 2 up, is correct, the overlap is not an issue and the stock can rise to $200 or even higher. We should know soon enough what applies.

CP quick update

cp mar 13 2016

If you sold today at >$185 you would have gotten at least $187 or so. As mentioned this one could go higher by another $10+ but we would caution the longs that this thrust can turn around in the blink of an eye. The RSI is entering overbought territory for the first time in a long time and if the triangle is correct, a drop back to $160 is next as a minimum. By the way, the entire triangle can be moved one step to the right if you prefer.

P.S. Today’s high is at $193.88 that is up almost $9 on the day. This is clearly a “thrust” and most likely  a third wave at that. $200 becomes more likely but I am always too cautious.

CP update

cp apr 11 2016

We have been wrong on this railway, never expecting it to reach such lofty highs. But then it did drop 42% in the last year. Moreover it did it in what could be seen as a clean 5-wave sequence. Now we are doing the first a-b-c retracement of that drop which should reach the 4th wave of previous degree and /or the 62% retracement level, both at about $200 or so. By coincidence, that is also where c=a. A very nice triangle – in the b-wave position – provides the icing on this cake. We would not wait that long and get out at $185 or earlier. Then the drop continues for , at least, another hundred points towards $100 (about 60% down) or further.

CP update

cp feb 10 2014 lcp jan 10 2014 s

We have been premature in calling a top on this one and therefore have been wrong so take all this with a few grains of salt.

Un till about 15 years ago this company was part of a conglomerate that consistently traded at a discount despite it’s historic significance as the binding force behind the Canadian nation. It took an American, ironically but perhaps not surprisingly, to wake this thing out of permanent hibernation. Or was it the delays in building pipelines? At this stage it does not matter, the stock trades at a p/e of 33x and yields a very rich dividend of just under 0.9%. The chart looks awful. Not only is the stock back into the channel established between 2001 and 2008 (not shown), but over the past two plus years it has traced out a classic 5-wave move, more than tripling in the process. A initial drop of about $50 should be expected.

It could still be argued that such a drop would only be a large wave 4 in an otherwise incomplete up move, but if the ‘08-‘12 move is interpreted as a large triangle (with a truncated e), this alternative becomes rather far fetched. This is definitely a sell or short right here or just a few dollars higher.