SHLD, Sears Holdings

We had completely forgotten this stock , here are the two charts, prediction and reality;

SHLD jan 23 2012 mshld apr 2012

The prediction on Jan 23 of this year was that the stock could climb to perhaps $90 when the stock was at $53. It got to $85.90. It would do it fast. It did both for a theoretical gain of 62% and did so rather precisely as shown by the arrow. Also it announced the event well in advance even if we were late to take note. It dropped precisely to where the C=A would have suggested. From here we have no idea where it will go next preferring only to capitalize on the obvious.

SHLD update

shld feb 26 2012

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.

SHLD Sears , update.

SHLD feb 2012

Exactly a month ago (see previous blog Jan 23) we mentioned that this stock could have completed a very nice a-b-c down, where the c is a diagonal. These normally reverse themselves with a vengeance which is why we labelled this stock a screaming buy  provided it would exhibit side was action for a little while (in a triangle, which was incorrect). In any case the stock jumped 9.7+ dollars, almost 20% on some real estate financing story, whatever. Lets just call it the waves.

SHLD Sears Holdings

See previous blog.  We expected the stock to drop to roughly $20. It did but stopped dead in it’s tracks. Reason to perhaps change the count as follows;

SHLD Jan 23, 2012 bSHLD jan 23 2012 m

In the big picture the stock drops from $200 to just over $20, that, by any measure is a bear market and it could possible be all of it! If that were the case we would now be in a new bull having completed an initial first wave up followed by a deep correction, so deep that it almost retraces the whole first wave up. This is not at all unusual. The retracement would have to be an A-B-C which we have. Better yet C=A in terms of vertical distance travelled. The interesting part is the C wave, shown below in detail;

SHLD jan 23 2012 s

This is an almost picture perfect expanding diagonal triangle (3-3-3-3-3). Each leg, both up and down consists of 3 separate legs. There is always a lot of overlap and alternation between 2 and 4 occurs often. Once complete the rebound tends to be violent and  takes the form of either a new bull market or, at the very least an A-B-C up that should retrace the entire diagonal. Soon, perhaps at around $60 the A should stop and a pause should happen, often as a triangle. Should this in fact occur, the stock should be a screaming buy. Always use a stop just in case something else is going on. F, Ford is a good example of this particular pattern.