Exactly a month ago (see previous blog Jan 23) we mentioned that this stock could have completed a very nice a-b-c down, where the c is a diagonal. These normally reverse themselves with a vengeance which is why we labelled this stock a screaming buy provided it would exhibit side was action for a little while (in a triangle, which was incorrect). In any case the stock jumped 9.7+ dollars, almost 20% on some real estate financing story, whatever. Lets just call it the waves.
Just a quick update for the TSX. The TSX hit an interim high late October last year at about 12500. From that point in time it has spent 4 agonizing months seemingly going up everyday on Greece’s yes-no default comedy which is now getting the icing on the cake by way of the rather innocent sounding retroactive “collective action clause” which is essentially no different than the, in maritime circles, well accepted “general average” law. Over these four months the TSX has gained a grand total of 200 points and now sits just above the 62%. It has gone up in a fairly clear a-b-c in which the c-wave is a wedge or rising flag. It could be complete or add a little more to get to the wave 4 of previous degree level to finish wave 2. Then wave 3 down should start. On this index there is no compelling reason to change the outlook!
Talisman did not make that last leg down which we hoped for but were not sure we would get. We know now that it is not going to happen anymore. In the mean time the company reported atrocious earnings and the stock went up, a clear sign that things are getting bullish. If you did buy at around $12 or so look for about $14.50+ to get out.(see 2 blogs ago, where $3 on $12 was viewed as a minimum upside.)
Just a few days ago we suggested buying this stock below the market at around $33, which was roughly an equality point between two down legs over the past year or so, and the 62% Fibonacci point. (see previous blog) As it happens the stock dived down to $31.50 on horrific results and then rebounded briefly to above $37. This is and inside-outside day reversal pattern and a big one moving almost 20% in a single day and right on time to boot; here is the chart;
These charts do not do the move justice but they will have to do. Had you bought at $33 or below, you would have been up 10% for the day if you sold at the close. These type of days promise a little more usually. $40 is the top of a 4th wave of minor degree and $48+ is the top of wave 4 of the second downleg. Both could be reached. At the very least one should get a small a-b-c pattern, so far there is only an a, perhaps incomplete at that.
Long term ask your broker for real fundamental research, not the “we hold management in high esteem” rubbish. Veritas has just rated the stock as a sell over the longer term and they believe, according to a BNN presentation, that gold itself will move to about $1000. Right or wrong , who knows, but at least refreshing compared to all the Pavlov talking heads.