CP, Canadian Pacific Rail

This stock was split out of the larger CP conglomerate, the rails , hotels and shipping group started their own lives in 2001. Consequently there is no chart preceding that time for the individual components. Here is what we have.

cp 2011 cp20112

On the left, a model, text-book EW, clear as a bell and consequently more “predictive”. This is an EWaver’s dream come true. We have an initial 5 wave sequence up into the top during which the stock roughly goes from $20 to $90, a bull market by most accounts. Then the stock gets decimated in a clear A-B-C, losing 2/3 of its value. Then comes the correction of that drop and so far we may have all of it or only half. One would expect 62% for starters and perhaps to the B wave level , $6 higher. Given the very clear wedge, the equal vertical distance between C and A and the rolling over of both the RSI and MACD this should be good enough.

One could wait another 6 months and hope the stock reaches $75, and, of course, it is always possible that this analysis is wrong (we may, for instance,  be at the start of a new bull market and we are looking at a series of 1-2s that will soon explode to the upside). Perhaps, but not likely.

See previous  (Sept, 2010) blog below;

 cp sept 21 2010 2 CP sept 21 2010