ATH, Athabasca Oil Sands Corp., update

There are a total of 13 different patterns that are recognized by EW. Some are a bit problematic as it seems that the stock movements can be counted in so many different ways that the whole EW approach appears almost arbitrary and not always testable in real time. True, no doubt, but even so there are some extremely accurate and predictive patterns. The “diagonal triangle” is one of the best. It is easy to recognize due to overlap that does not occur anywhere else. It is always in a 5th wave  (leaving the question 5th of what open) or wave position. The stock almost always returns to the start of the pattern. ATH had one of these diagonals and here are the then and now charts;

ath m 2012ath dec 16 2012

ath 2012ath dec 16 2012 b

It does precisely what it should do, returning right to the start of the pattern. The trick, as always is to recognize this in advance so that it becomes tradable. Notice that the pattern can also be broken into two parts, a triangle followed by a thrust down; combined “diagonal”is therefore appropriate name.

In this particular case the diagonal occurred as the 5th wave of 3 (it actually failed by a very small margin). Presently we are in the 5th of this 5 wave sequence so a buying opportunity should present itself soon. This 5th wave may , in fact, already be complete but to be safe we are assuming that we are in wave 4 and have one more push to go to the downside. A buy at any new low!