Year: 2012

DD, E. I. DuPont de Nemours & Co.

Hamilton

dd oct 24 2012 b

This Yahoo chart goes back to 1962, not far enough to make a reliable guess at what the count might be. In black we show the possibility that the drop from $75 to $20 was, in fact, a completed A-B-C correction reducing the value of this stock by about 75%, bearish enough to be a bear market by any standard. In purple we show the other alternative which is a little more in synch with the rest of the market. It is 5 waves down for wave A in a zig-zag, followed by a B-wave of about 60% and C having started with waves 1 and 2 (and another 1-2 in the more detailed chart). The two counts are, by the way, not necessarily mutually exclusive if instead of a zig-zag one looks for a double zig-zag. For the moment we prefer the purple scenario if for no other reason that it suits this  aristocratically named stock a little better.

dd oct 24 2012 mdd 24 oct 2012 s

Wave 3 has just started and should become a bit more decisive soon.

FB update

Hamilton

Back in July when this stock was just under $23 our best guess was that it might bottom around $17. It did not quite get there as it stopped falling at $17.55. Here is the chart:

fb oct 24 2012

In the event that you did manage to buy some stock at around the low, it might not be a bad idea to take your profit. From the low of Sept. 4 the stock has followed a pattern that resembles an a-b-c counter-trend correction. Provided the stock does not cross through the $25 plus a bit level this could still just be a 4th wave.

HPQ update

Hamilton

hpq oct 24 2012 mhpq oct 24 2012 s

From both the medium and small sized charts a case can be made that HPQ is about to make a bottom or might already have done so. A dip below $14 is definitely a buy and for those that are a little more courageous here and now is good enough.

hpq oct 24 2012 big

The big chart  allows for a further drop to somewhere between $14 and $11, an average of $12.50. $2.50 down against $10+ up is a pretty fair risk/reward by any standards but if you are a little timid why not just stare the cat out of the tree. That too may work.

Dow Chemical

Hamilton

dow chemical oct 2012

If it pans out is a different matter altogether , but theoretically if Dow Chemical is following the script of a large “flat”, this is what one might expect. In the real world stock prices never go below zero simple because no one would be interested in selling, however conceptually a value below zero is perfectly acceptable in a capital intensive industry such as this. Lets just say that it will reach a value below $5 and above $0.

Late yesterday the company reported a drop in earnings of 39% (nice Fibo # by the way). It was trading at a p/e of about 18. To keep that going the stock would obviously have to shed some $12 or so and even then it won’t be cheap. Betting on this can be a little tricky initially as the market, applying “modern” economics, just loves companies that rid themselves of their workforce, or at least a good part of it. Don’t forget, bad is good!