PD, Precision Drilling

pd jan 10 2015 b

pd jan 10 2015 mpd jan 10 2015 s

We have all three charts here, big, medium and small. The top of a cycle is assumed to be in 2006. From there we have an absolutely classic correction in the form of a perfectly formed A-B-C that wipes out almost all the progress over the previous ten years or so. It hits bottom in synch with the rest of the market in early 2009. The low is around $3.38 exactly where both legs of the zig-zag are equal. This is the point where a stock either goes bust or starts a new upward cycle. We assume that wave 1 up of the new cycle occurs from 2009 to 2011. Next we have the inevitable correction of wave 1, wave 2. Wave 2 appears to be doing a very symmetrical a-b-c down and in the process takes back nearly all of wave 1, as is normal. The c of 2 does not look as if it is complete as 1. it is not yet equal to a, and 2. it has not completed a 5-wave sequence as all c waves should. You need a very sharp pencil to figure this out but nevertheless the target would seem to be around $4.75 or so, not far from where we are today. Furthermore, assuming our interpretation is correct, the stock should not trade below $3.38. The next move should be wave 3 up which at the very least should exceed wave 1 in size, that is >$16. So roughly speaking you could lose 30% or gain 300%. When did your broker present you with such a proposition? For free!

We have no fundamental view on what might make this happen. One possibility is that the famous Belgian dentists of the past mistake this company for some sort of association of dental practitioners in the forefront of that science and are all over it to get a piece of the action. Investors’ memories are, after all, very short.

PD, Precision Drilling

PD may 2012

This was a screaming buy back in the mid nineties when it briefly traded below $9. At $2/$3 I assume it made a low and is now in a new bull market. Wave 2 should take the stock to about $6/$3 so there is little reason to get overly excited yet. If this was not wave 2, but just another a-b-c rebound, as we have assumed in previous comments, new lows are still possible. Nevertheless worth keeping an eye on.

PD, Precission Drilling

July 22 we commented that this stock was ripe as a rotting apple and should drop any moment;

PD july 2011 pd oct 13 2011

On the left then and on the right now. The stock rapidly lost 60% or more of its value as predicted Unfortunately I was not looking at it when it hit $8. The ideal target (short-term!) is $7. If it gets there soon it would be a buy at that price

PD, Precision Drilling. $WTIC, West Texas

pd l sept 2011 pd s sept 2011

Precision Drilling may just have the same pattern as Netflix had the other day, that is an A-B-C down where C=A, give or take. In PD’s case a “logical target would be around $8 even though the level of the B-wave on the way up is a little lower, more in the order of $6. In Canada things might brighten up a little bit as soon as the frost gets into the ground. These rigs are heavy and consequently easier to operate in the cold , never mind the black flies etc.

Looking at West Texas suggests oil might still want to go a little lower, more in the order of $70 near-term, perhaps enough to give this one a little push down.

wtic sept 2011