Two stocks among others that tell us to be careful in assuming that the next move is down. Without looking at anything more than just the past half year the EW signature for both the Bank of Montreal and Bombardier are decidedly bullish. What it means is that there is a possibility that this will drag on another few months if Janet Yellin is able to pull a live rabbit from a hat. Alternatively perhaps Quebec is going to succeed from Canada after all.
TRQ should be a buy here. A four month long triangle probable defines the 4th wave of 5 of C in a large A-B-C where C is roughly of equal size to A. At $3.20, coming from $29, makes for a nice low to complete this 3 year descent. We probable have already done a minor wave 1 up followed by a small wave 2 correction. Next should be a more powerful wave 3 up. Start with a little bit and add once the trend line is breached (about $4). KGI, Kirkland Lake Gold is in a more or less similar position but not as well articulated as TRQ.
Did not even know this thing existed un till it was mentioned by E-wavers from Gainsville who point out that the outstanding volume in this gem increased about nine-fold in the past year or so. Also, as the chart shows, the value of a unit of this ETF has increased 4 to 5 times since the lows, outperforming every US index by a large margin.
Initial Public Offerings (IPOs) traditionally are priced too low. Intuitively this seems rather stupid as from a company’s treasury’s point of view you want to get the most out of it so you would prefer higher issue prices. However this consideration is often trumped by the desire to have a “successful” issue, one that goes straight up. Furthermore management options are often priced at a discount to the issue price giving rise to larger capital gains. On top of that, brokers/dealers do not want to get caught with unwanted inventory and just love the potential to hand out freebies to there best clients. All this combines to make IPO shares a favourite investment provided you can get your hands on them early (very early!) in the game. Clearly this is not a buy-and-hold kind of thing as the IPOness wears off rapidly and therefore the stocks in the fund need to be refreshed constantly. Presently if holds stocks like AbbVie, Facebook, General Motors, Kinder Morgan etc.etc.
ETFs are not derivatives that derive their value by reference rather than actual ownership, like for instance commodity futures. The volume in these can expand well beyond the volume actually in existence with the link to reality only reasserted closer to the expiry date,provided the delivery requirements are in kind, not cash. The ETF actually has to own the stuff so additional interest is immediately and directly transmitted to the demand , or offered , side as the case may be. The risk with this particular one is that if the IPO market ceases to continue to exist, this model will stop working all together. Long before that it is subject to all the other, normal risks. A sell in our opinion.
We have been premature in calling a top on this one and therefore have been wrong so take all this with a few grains of salt.
Un till about 15 years ago this company was part of a conglomerate that consistently traded at a discount despite it’s historic significance as the binding force behind the Canadian nation. It took an American, ironically but perhaps not surprisingly, to wake this thing out of permanent hibernation. Or was it the delays in building pipelines? At this stage it does not matter, the stock trades at a p/e of 33x and yields a very rich dividend of just under 0.9%. The chart looks awful. Not only is the stock back into the channel established between 2001 and 2008 (not shown), but over the past two plus years it has traced out a classic 5-wave move, more than tripling in the process. A initial drop of about $50 should be expected.
It could still be argued that such a drop would only be a large wave 4 in an otherwise incomplete up move, but if the ‘08-‘12 move is interpreted as a large triangle (with a truncated e), this alternative becomes rather far fetched. This is definitely a sell or short right here or just a few dollars higher.