Year: 2012

PAA, Pan American Silver (in Can $$)

Hamilton

paa 2012 lpaa 2012 s

EW seldom provides an unambiguous answer, there are always little things that do not fit perfectly. PAA is a good example. A case can be made that the stock hit a major low yesterday. But the notoriously imprecise long-term chart still leaves a little leeway to the downside. The short term chart allows for two different counts depending on which top was the real top. If the first one is chosen (in black) this should be it. The RSI, MACD and the 62% retracement support that scenario. The fact that waves 2 and 4 do not alternate is the only fly in the ointment but it does not categorically negate the count! When all is said and done, the difference is only about$2 at the most. The first (lowest) target for a rebound is about $20 and the most probable target is $25. Given that the stock is down almost $30 these targets are not unrealistic or overly optimistic. Take your pick.

PS. Previous blogs sketch the path this stock would take quite some time ago and, if I may say so on behalf of EW, with uncanny precision. Just plug/search the index for PAA.

TSX update.

Hamilton

tsx may 17 2012

Just a quick reminder of where we are in the big picture. Things happen on an incremental basis and what feels like perfectly normal may actually be totally absurd if you care to step back for a moment. It is true that at roughly 11000 the TSX has not moved for about 12 years. But it is also true that in the past 25 years the TSX has only been higher than it is today for less than perhaps 2 1/2 years, this while the world supposedly collapsed financially! It would appear to me that the realists that think that the index might drop to say 8000 should not have to prove their point  and that the burden of proof  should be put on the armies of pushers-of-stock that are, forever,  looking for higher levels.

SI, Siemens

Hamilton

Siemens was predicted to go to about $81. It is getting there but it has taken a long time. The outlook remains quite bearish (see previous blogs), but rather than regurgitate the EW analysis it occurred to me that it might be refreshing to use the Head & Shoulder pattern, something I know very little about. Here is the chart;

si may 2012

The left shoulder and the right shoulder sort of fit into a band that should run close to horizontally. Then, after the break-out under the lower channel line, the stock should fall by an amount similar to the distance that the head exceeds the upper trend line. It is as simple as that. Target $60. The EW target, by the way, is half of that.

STD, Banco Santander S.A. (American Deposit Receipts)

Hamilton

std may 2012std picture

This just happens to be the biggest bank in the Euro area. It gobbled up the likes of ABN-AMRO, albeit only briefly, and a whole slew of other banks or finance companies. Originally it hails from the Santander region of Spain. In terms of building headquarters these guys out spent most of the competitors.

When they say buy when there is blood in the street this is what they mean. The stock is trading at a P/E of 6.7 and yields 20.6% and it may just get a little better than that over the next few weeks. The magical number seems to be $4, and should it get there it will be the third time in less than ten years. Then when it bounces it moves quite impressively.

From an EW perspective the pattern is a large A-B-C X A-B-C , which is simple an A-B-C, except that the details differ. Theoretically the ideal target would be $4 or a little below. Presently we are either in the 5th wave of a thrust out of a triangle (having already completed the triangle measurement), or we are in a “wedge” type of structure with very little left to go down. Today’s low, so far , was at $5.52 or about a single dollar above the lows. A buy at $4.50 would only be suitable for those that are willing to loose it all, but it is exactly those people that become rich.