Year: 2011

UN, Unilever the Dutch/Anglo conglomerate

Hamilton

Much of what goes into soap also goes into margarine, that is how the English (soap) and Dutch (margarine) decided to work together back in 1930 More recently the company was also working together with Proctor and Gamble which earned it a Euro 300+ million fine for running a cartel. It has also come into the spotlight for doing away with it’s defined benefit plan, long held out as a model. This is a big company, with a P/E at about 17 and earning a dividend of about 3.5%. The revenues are around 50 bln. a year. Employment , as with so many large companies, has been dropping steadily;

UN emp

I show this simple because so many of us still believe the myth that large companies create jobs, for the most part they actually do the opposite. In any case here is the chart for UN;

UN L

Very nice 5 waves up, and a well defined triangle in the wave 4 position (it has to be!) followed by a thrust up of the appropriate size, staying precisely within the channel boundaries. It then drops almost 62% and the question now is if that was all there is or is there more to complete the correction and make it a bit more complex?

UN corr

From the lows of March 09, the move is simple too bullish to be a new bull! and there is no way to count it as one. Also the initial A-B-C or 5 wave down should be followed by at least one other such leg so our educated guess is that the stock is doing a fairly large flat (which fits better with an initial A-B-C down!). We are now in the B wave up which itself is an a-b-c. This leg needs to make a higher high, that is above $33 to complete which could happen in the next few days. It may continue to about $36 where the c leg relates to the a leg by a very common 0.618. This could all be wrong , in which case the stock would probable go to the upper trend-line which is ONLY $4 higher at about $40

This analysis jives very well with that for Colgate Palmolive (CL) , see elsewhere in this blog. On balance this is a sell in the next few weeks at somewhere between $33 and $36, you risk a few dollars on the upside but avoid the potential of losing $20+ on the downside.

SMF Semafo

Hamilton

Ever been to Burkino Faso? It is in West Africa and one of these hell-holes comparable to the Congo. They have a lot of stuff there including gold and this company digs it up. Recently it reported a 9% decrease in production but in the meantime the stock has dropped about 50% even though there sales price at $1400 is substantially higher from previous results.  Go figure. The charts tell us this is a buy, soon;

smf b smf m

smf s

We chose 3 charts this time, large, medium and small. From the Bigchart it is clear that this stock, like so many others in this space has had an explosive run for the last two years. An excellent reminder that one should always buy the worst stocks and not the American Barricks , Goldcorp’s and Kinrossis, but choosing the right one is not that easy. Anyway, moving on to the medium chart a nice % waves up CAN be counted (same as 9 in B-chart). I acknowledge right away that this may not be a correct count,  but given all the other facts it does make sense. Ergo we are now in a correction of sorts. These do a number of things; drop about 50/60%, drop into the area of wave 4 of previous degree, do so in an a-b-c three-wave structure, in which c is often equal to a. It is  doing all of these! On top of that the RSI and MACD are not confirming the new lows so perhaps a turn is around the corner.

Should it turn at about these levels the next target price would be around $11.5 so if you pick it up at about $6.75 you would end with a handsome profit.

Ford, Update .

Hamilton

F apr 14 2011 F apr 14 2011s

By special request a quick update on Ford. After retracing the wedge to about $10 the stock proceeded to go on to $19. This is where the 4th wave of previous degree resides and therefore a very “logical” target. At that point it had , at least under one count, completed a 5-wave bull up-leg for a wave 1 of a new phase in the life of this stock (one hopes).

So far, see detailed chart, the stock has gone down in a nice 5 wave move and therefore needs another 5 wave move to complete its correction, but not before an intervening a-b-c is complete. My best guess here is that we still need to do the c part, to , say , $17 or so and only then will we get the next bigger leg down to complete the correction. A logical target, as always, is the 4th of previous degree, in this case $10 but it certainly could go further.

In the long run it is hard to even guess how high the stock might go. Intuitively I doubt very much that it will ever again go beyond $25 or so. This industry is barely a hundred years old but seems destined to experience some rather major changes in the not to distant future with way more competition than ever before. The Americans still seem emotionally hell bent on building cars by taking two railway rails and putting a 560 cubic inch engine between them , which does not put them in the front row for innovation .

FVI , FR , HZU all silver.

Hamilton

FVI apr 20111

Got this one wrong the first time, thought it was a sell at the red arrow. In the meantime it has added 2 waves and now one can count 9 in total which may, once again herald the end of the sequence. See also the charts for FR , First Majestic and the Hor Betapro 2X ETF;

FR 2011 HZU 2011

FR also has this 9 wave sequence, numbered as the normal 5-waves bull market. It too may be complete or close to that. HZU is a little new to the plate but may actually be contributing to this momentum action. It is nearly vertical as we approach the Hunt brothers $55 peak back in the early eighties. We may not reach that level.