This may be a better presentation for 5N Plus. The change is in blue and fits better. It has an a-b-c B-wave in the middle with a clear triangle for the b.
Year: 2012
SU Suncor
ends
Suncor (see previous highly precise blogs), of course fits the above pattern to a T, the only difference being that it is not yet as far as 5N Plus. If the C ends up being more or less vector equal, it should make a new low below $18 and could do so on a point on this circle. It would certainly come as a surprise to many that seem to be wedded to the idea that gold and oil have nowhere to go but up. Time will tell!.
You can enlarge both charts and move one up so they end up being side by side. The similarity will become more compelling , especially if they are properly aligned with regard to time!
5N Plus Inc.
The name is derived from the degree of purity of the metals that it makes, as in 99.999%. It used to produce almost exclusively for First Solar (FSLR), a company that has recently announced lay-offs etc.etc. (see elsewhere in this blog). In the meantime a whole different business was bought so now solar panels represent only a small portion of the company’s business but in the process the company got burdened by a lot of debt. Back in 2008 this was a darling for speculators who were perhaps carried away by the purity of the enterprise. Here are the charts;
The Bigchart is on a semi-log scale, and the shorter-term one on a normal arithmetic scale. Looking at the Bigchart it could be argued that an entire correction from the $14 high was completed today at about $2.85 with C being vector equal to A, and a loss of more than 79.6%. The smaller chart displays a very nice wedge formation that has hit the lower boundary precisely. Furthermore the stock appears to have fallen out of a minor degree triangle which suggests that a bounce to $5 might be in the cards, even if this is not yet THE bottom! As always, no guarantees.
By the way, this is an excellent “model” for what could be expected for most stocks once the bear is complete. A little red arrow indicates approximately where we are right now in that process.
BNS
Bank of Nova Scotia did pretty well as expected (see older blogs), except that it just had to go to the highest reasonable possibility on the rebound. Having reached $57 it started to decline again and is about $3 off that level. The rebound is clearly an a-b-c correction and therefore it follows that the stock should one day trade at least below the lows on this chart (and for the same reason but on a larger scale below the $25 level of March 2009). We now have overlap situations that essentially exclude any other count giving a great deal of confidence to this outlook. Obviously the view in Canada is that nothing of the sort can happen as our banks have an oligopolistic stranglehold and will simple keep adjusting their fees in order to keep the process going (they just abolished free banking for seniors). But nobody knows where the growth is supposed to come from, interest rates could rise, the Volcker rule has yet to be implemented and the dependence on “wealth management” has increased at a time when wealth might actually start dropping. There are dozens of other reasons why banks may get hurt not the least of which is their uncanny ability to every ten years or so to find a hole to fall into. Not a time to own these stocks.
BNS is. of course, one of the better performers in Canada, perhaps because of it’s international scope. Even so a quick look at the long-term chart below makes the point;
The high was at $61.28, and it made that high after the great recession. Still we think the “orthodox” top occurred in 2007, making this the top of a B-wave but either way the stock should revisit the $25 low. Over roughly 20 years and starting at $5 that would still constitute an annual compound rate of 8.5%, not including dividends!