PD, Precision Drilling

pd jan 10 2015 b

pd jan 10 2015 mpd jan 10 2015 s

We have all three charts here, big, medium and small. The top of a cycle is assumed to be in 2006. From there we have an absolutely classic correction in the form of a perfectly formed A-B-C that wipes out almost all the progress over the previous ten years or so. It hits bottom in synch with the rest of the market in early 2009. The low is around $3.38 exactly where both legs of the zig-zag are equal. This is the point where a stock either goes bust or starts a new upward cycle. We assume that wave 1 up of the new cycle occurs from 2009 to 2011. Next we have the inevitable correction of wave 1, wave 2. Wave 2 appears to be doing a very symmetrical a-b-c down and in the process takes back nearly all of wave 1, as is normal. The c of 2 does not look as if it is complete as 1. it is not yet equal to a, and 2. it has not completed a 5-wave sequence as all c waves should. You need a very sharp pencil to figure this out but nevertheless the target would seem to be around $4.75 or so, not far from where we are today. Furthermore, assuming our interpretation is correct, the stock should not trade below $3.38. The next move should be wave 3 up which at the very least should exceed wave 1 in size, that is >$16. So roughly speaking you could lose 30% or gain 300%. When did your broker present you with such a proposition? For free!

We have no fundamental view on what might make this happen. One possibility is that the famous Belgian dentists of the past mistake this company for some sort of association of dental practitioners in the forefront of that science and are all over it to get a piece of the action. Investors’ memories are, after all, very short.