ECA, Encana update.

First the big picture, on the left my June 20, 2011 blog and , on the right today’s chart;

ECA ECA oct 2011

At the time I argued that the stock was not down enough to complete a logical pattern and that it was probable tracing out a triangle that needed one more up move. In retrospect it did not need much of a move before starting the anticipated downward trek. It was a buy above $35 and below $23. Well, we got to $19 and here the stock would have been a buy, but;

eca s oct 2011 eca ss oct 2011

First of all the triangles apex is still at least half a year out, often that coincides with the low but it certainly does not have to. More importantly there is still a 5th wave missing, in fact, quite obviously. Considering that the is at 20 according to one provider and 40 according to another, it is clear that this is not cheap even if it is down 80% from the top. It actually pays a dividend of around 3.75% which helps. For the long term this is clearly a relatively good buy, but a lot more so with a 5th wave.