Year: 2012

AEO, American Eagle Outfitters

Hamilton

aeo oct 2012

American Eagle Outfitters is an apparel retailer, trading at a p/e of 23 and yielding about 2%. The people at the G&M see a W-formation and conclude that the stock should go higher, at least if it doesn’t go lower. We think this is a sell, now. The stock drops from $35 to $6 with the rest of the financial universe, then regains it’s footing and retraces a perfect 61% of that in the next 4 years. It does it in an uncannily symmetrically proportioned a-b-c in which even the b breaks down again in a perfect a-b-c. By all accounts this should be it and wave C down just started.

F, Ford update

Hamilton

See also 20 or so precious blogs. Here is today’s chart;

f oct 13 2012

Ford had a beautiful diagonal 5th of 5 that took the stock to below $1 while at the same time almost guaranteeing that it would rise back to about $10. It did and then some, all the way to the 4th of previous degree ($18) and then some ($19). Since you cannot get much lower than <$1 it is reasonable to assume that a new bull market started from that point on. The move to $19 would then be wave 1 up. The 2 year decline from there would be wave 2. Waves 2 can  and often do retrace much of wave 1, but a reasonable first guess would be about 60% for starters, which is around $7.80. Looking at the details;

f oct 13 2012 s

One more down move seems to be in the cards, how far is anyone’s guess but for the moment $7.80 seems just about right.

TLM, Talisman update

Hamilton

See previous blogs, last we recommended stepping aside once the stock reached $15. After that it did dip down again to a target of $10 but did not make it to the “ideal” target of $8 having been stopped by the line connecting all lows. Here are today’s charts;

tlm oct 13 2012tlm oct 13 2012 s

EW allows for various interpretations at this time. On balance it would seem that the stock will go up after this latest dip (wave 2?) is complete at between $12 and $11 (60%), then another leg up (wave 3 or wave c) should start that could easily take the stock to $17 or higher. On the downside one has to keep in mind that the stock never made it to the “ideal”target of $8, so it could still do that. A stop at around $11 right now seems appropriate. The RSI and MACD favour higher levels, oil itself perhaps not but there seems to be very little correlation between this stock and the stuff itself. The stock itself has a large idiosyncratic or stock specific component and therefore does not listen to the same drummer.

In the alternate count the stock could rise significantly in the B wave and then more or less collapse. Initially that should still be positive.  See also previous blogs.