Year: 2012

L , Loews Corp.

Hamilton

l 2012l 2012 s

Loews Corp. has been trading around $37 now for about 3 months, or , if you take a broader view, 6 months. The action has the look of a triangle, perhaps not a perfect one but a triangle nevertheless. It is entirely possible that we are presently still in wave c and not in e as shown in the chart, but that does not rhyme well with many other triangles that can be observed. So, assuming this is correct, we should be going down soon. A break of $36.5 will be needed to add confidence to this outlook.

BLL, Ball Corporation

Hamilton

bll 2012 lbll 2012 s

I had the privilege a few moons ago to stay in Muncie , Indiana for the purpose of building a house with Habitat. Muncie is a university town right in the middle of the redneck USA. I was there during the July 4th celebrations and that way you got a chance to learn what America is all about, good and bad. Anyway it is here that this company chose to build it’s HQ. Very suitable considering they make canning jars among other things. As close as you can get to motherhood and apple pie.

The stock chart is a perfect EW example even if I must confess not “seeing” the 5 waves in 5 all that clearly. The channel line is as clear as a bell   and so is the first wave down followed by an a-b-c correction or rebound. It now has gone as far as it must and could stop any moment. Then wave 3 down should start. Ultimately the stock should see a new low.

YUM, Yum! Brands Inc.

Hamilton

yum 2012

This one is in the restaurant business. I have never been in one but judging by the name, it should be nice and the food yummie. I think it is a sell. Here is why; At the end of wave 3 the stock was worth roughly $40, assuming it started at the hypothetical zero level, waves 1 and 3 together added $40. Wave 5 is presently about to do the same, say at $62. This is a frequently recurring relationship. Next we are hitting the upper trend-line of a 7 or more year channel. 62 is ,of course a very nice Fibo number. Last but not least, with a p/e above 23 this one better keep growing at a handsome clip or something will give. I wish I owned it, and if I did I would sell at $61

IBM update

Hamilton

ibm jan 2012

Back on July 19th 2011 the chart on IBM suggested that the stock would not trade much above $193 ????.  Now , 1/2 year later this prediction can be refined. The stock will not trade above $194,90, a recent intraday high. Then and now the reasons are mostly the same. First of all we have reached the parallel trend-line that connects the lows of 2 and 4 and is drawn through the high of 3 (standard channelling). Secondly the stock exceeded the line drawn through the highs. And thirdly wave 5 is now equal to wave 3 and as 3 is usually the longest 5 can not go higher without violating that guideline. To that can be added the Mnt. Everest X2 effect and the interesting fact that , despite Warren Buffett’s professed agnostic view on all that is technical, he bought a nice chunk of this stuff and the stock immediately cratered about $10 but came back to a new high after that. Today the stock sits at $182

Curiously, if one cares for cyclical things, the stock has displayed a relatively stable cycle of about 12 or so years. Each time it peaks it suffers a loss of at least 50% or more. Assuming history repeats itself you are about to lose half your money; one needs a lot of faith in the oracle to put up with that. Also be careful not to infer that since this company is known as Big Blue, it is a blue chip stock, they simple do not exist anymore.

The book value per share for this stock is $18.91 according to Yahoo finance so this stock is trading at almost 10x book.