Month: November 2010

ABX, FVI, Fortuna.

Hamilton

ABX is a reasonable proxy for gold being the largest producer and, only recently, being totally un-hedged . Here are a few charts;

abx nov 2010 2 ABX nov 2010

I am very agnostic about all the arguments that are doing the rounds that gold can only go up. For 15 years or so this stock has made no progress whatsoever. Even after doing away with its hedge programme, a change that really sounded more silly than ever at the time, hardly a budge for this largest gold miner. Looks very much like a wedge, that is for the c part of an a-b-c correction. These sometimes go on longer than one could reasonable anticipate, but since we are pretty close to double-topping , my guess is that it is game over.  It is actually quite a non confirmation between the ‘stuff” and the stock. From the lows in 2001 , or so , this stock has gained about 150%+ in value, the stuff  itself is going up by 5 to 6 x.

Some silver stocks, poor man’s gold, equally suggest a little caution. Here is one out of many.

FVI nov 2010

Nice 5 waves, maybe?

EMP.A Empire Co.

Hamilton

emp.a nov 2010

A dollar or two this looked like an excellent short. Now that a few months have passed and the stock is worth a few dollars more , it looks like an even better short The big picture from last August, to refresh;

EMP aug 2010 2 EMP aug 2010

More time was consumed but it has traced out the stylized top much better this time. The $60 is a good level to go short.

MFC, Manulife Financial.

Hamilton

MFC nov 2010

Manulife, as discussed earlier, is a near perfect barometer of where the TSE and other markets may go. This company believed the nonsense that was widely circulating like no other and, having eaten its own cooking  is very sick. In a sense it is the proverbial canary in the coal mine. So far the bird has not succumbed to the toxic gasses but should it fail to cross the upper trend-line soon, things are starting to look downright ugly! The a-b-c (temporary) correction to say $30 would then not apply. Instead a 5-wave C wave would become more plausible dragging the stock down to $4 or lower. Vector equality between the two down legs would occur approximately in March or April of 2012, but a break below $13.50 or so would suggest the bear case is the right one.

MAL, Magellan Aerospace.

Hamilton

Initially bought at $0.33, and sold subsequently is worth revisiting just in case it is still owned.

MAL nov 2010

The correction from the lows is looking a lot like an A-B-C in which the C is forming a diagonal triangle, a.k.a. pennant or rising flag. These are bearish structures and this one has lasted a full year and travelled the exact same distance as the first up-leg. The RSI and MACD are dropping. A sell in my book.