This stock is now down about 20%. As you recall we had a target of $62.50 (apex of triangle, see previous blogs). Using the “gap in the middle” tool from our witchcraft toolbox, we find a target of $61, so now we have a cluster.
The wave count would be a 1-2, 1-2 finishing at $82.73, then another 1-2 of wave 3. If correct the bounce today is a wave 4 of 3. So we have a lot more to go before this is complete.
Harman Intern. Industries is the parent of the better known brand name Harman Kardon. They make audio equipment and have been around since 1953. Back in the early seventies the bank for which I used to work as a credit officer had large lines of credit to this company.
Looking at this chart we see an EW pattern known as a “flat”. The A and B are most likely complete and the C should then follow. As the name indicates, the whole thing should end up at the same low of the A wave and often well below that. This C wave, unlike the A and B waves which are 3-wave structures, should unfold as a five wave structure. The P/E is at about 26. A sell for sure.
We had an $87 target well before it got there and are now looking for $62.50 as a minimum. See previous posts for a better look at the triangle that underlies this prediction. The stock has now fallen to $76, about $11 or nearly 13 % below it’s recent peak. The RSI and MACD both suggest a little rebound soon but this downward climb is not over.
Individual gold stocks have not always followed the same path, ABX and G are down but FN was, until recently still up, so we will use the XAU. As per the June blog we targeted the XAU to go to about 60 (it was at 104 at the time). There is at this point no reason to change that outlook. The triangle on which this prediction is based is pretty clear. Having said that it is also fairly clear that this sector as a whole has been crushed and it stands to reason that, using the hopelessly incorrect Keynesian view of economics, gold stocks should do well as other stocks sink. So there may be individual gold stocks that are approaching a good buy level, but generally this is not yet the case. Here is the big picture once again;
At a level slightly above 60 this index will start making a new low, which is to be expected if it is a C wave. Also the triangle measurement will be reached and time wise the upcoming low may occur right under the apex. We will stay with 60.
Obviously gold stocks are cheaper than then were at any time in the past 10 years but they are also more expensive than ever in the 1000 years before 2004.