Month: August 2011

CL, Colgate Palmolive fine tuned update

Hamilton

Because this is the ultimate blue-chip stock it is good to keep a close eye on it. So far it has done mostly as expected even though just a few weeks ago it looked ready to go but then manages to regain it’s composure in short order. Here are the charts again now that we have reached $90.99;

cl aug 31 2011

This is the preferred count. It has a pennant, wedge, rising flag or “contracting diagonal triangle” as a 5th wave. It should peak exactly at $91 but my pencil really is not that precise. Furthermore a “throw-over” of a dollar or two is not at all unusual.What supports this count is the fact that wave 3 remains the longest, not a necessity but nevertheless the most common situation. It also fits the markets overall best considering they started moving down half a year or so ago. But there is a possibility that this count is incorrect:

cl aug 31 2011 2

Using Google charts for variety, a case can be made for a 1-2, 1-2 start which then has to end in a 4-5, 4-5 as shown. The overlap does not matter because it does not occur within the individual legs. The potential target would be $100, that is to the upper trend-line. I do not know which interpretation will prevail but I do prefer the top one. In the end, if you buy your puts as suggested you should profit quite a bit either way. The most logical target is $40!

$90 puts for Jan 2013 are going for about $9/$10. The stock moved $10 up and down during August.

CI, Cigna

Hamilton

July 12 we warned that this stock was ripe for a solid drop despite the reasonable P/E etc. The stock had been around $52 the day before. Here is what happened:

ci aug 2011

Barely a dollar higher and a week or so later the stock goes into a tailspin dropping from $53 to almost $41 or almost 23%, right into the first logical target in a nice 5-wave move. It has also retraced 62% or so in an a-b-c correction. The next dive should come soon and take the stock to about $30 (see previous blog).

S, Sprint-Nextel

Hamilton

s aug 2011

Today’s anti-trust objections to the merger of ATT and T-Mobile has given this stock a little boost. Perhaps it is the beginning of a new bull but I do not think so. For the moment the action over the past month have  the distinct look of a wave 4 a-b-c, implying another down-leg right around the corner.

SWC , Stillwater Mining Company.

Hamilton

 

swc march 10

Back in April 2009 this stock was recommended for a move up in wave 3. It was a little under $3 at the time. Since then it had moved up considerable;

swc aug 2011 swc aug 2011 s

It got to $26 and then started breaking down. It looks like 5-waves up followed by an a-b-c down. The down part is clearly not yet complete but should be around $10.50 or so, where wave 4 of previous degree resides and where the rise from the lows will be corrected by about 62%. These miners dig up palladium and platinum, both precious metals that are also of commercial use particularly in catalytic converters . You win both ways!