As always there are different ways of counting this one, for instance a big triangle could be inserted right in the middle as wave 4. However , no matter how you slice it the low of wave 4 is at about $21 and that is where you normally return to. (1) The â€œboxâ€as Gartman refers to it is at 50-60% retracement. At $21 we would have 71% retracement. (2) The drop from 72 to 24 could be a 5 wave structure that is much larger than ever seen before. (3)
The diagonal, or in English the clear wedge formation is near perfect and promises a rapid and violent return to its base (which I do not believe but there you go). (4) The wave 4 triangle in this structure measures to about $23 , about where we are (5) and the low is situated pretty well perpendicularly under the apex (6). Any time the RSI, relative strength indicator drops below 30 their is a turn-around of $5-$15; we are there again (7), same thing for the OBV, on balance volume which has never been lower and cannot go lower without going off the page (8). The stock pays an 11+% dividend and has a P/E of about 6 which I think is Benjamin Graham land (9) Last but not least this , on a risk/reward basis, has to be a buy relative to the other Canadian banks based on the relative size of the correction to date (10). Target $37.5 minimum.