Month: February 2015

RIG, Transocean Inc

Hamilton

rig feb 7 2015 lrig feb 7 2015 s

The ticker says it all, these guys are drillers, ocean drillers to be more precise. Deep water drilling is expensive and in order to survive the price of a barrel of oil extracted under these circumstances is somewhere in the order of >$110. No wonder then that demand for their services has dropped off a cliff.

    These are both semi-log charts. When the movements are very large, as they are here from $195 to $15, the semi–log scale gives a better expression of the proportions of the movement within the frame of the chart. Looking at the Bigchart we suspect that we have an a-b-c, with the b being a triangle. We are not sure where the a ends and the triangle starts (it could be one step to the right from what is shown in red ), but this does not change the essence of this corrective structure.

    Often the c is (vector) equal to the a. That suggest a low of about $12. If that is all there is to it, this stock would be a buy right now. However, c waves always subdivide into 5 separate waves and , so far at least, we appear to be missing a good part of 4 and all of 5. So this correction is not yet finished. It may take a while, maybe a year.

    If you believe oil will shoot back up soon (I do not share that opinion), than Transocean must be one of the better buys given its leverage to oil.

BCE, Bell Canada Enterprises.

Hamilton

bce feb 6 2015 bbce feb 6 2015 s

Apparently the stock was downgraded today by one or two dealers. This is very unusual as this is one of the few remaining blue chips in Canada and investment dealers do not normally quarrel with success.  However they may be right!

Like our banks this company has had a monopoly/oligopoly throughout it’s existence. It is the largest of three and mostly the price-leader. It is very well politicized and serves quite often as a career destination for high ranking civil servants that are in need of a boost to their pensions. You will not find this company on any list of the best managed enterprises ever.

EW tells us something is brewing. Notice that in the G&M chart on the left, wave 3 and wave 5, if that is what they are and we definitely think so, are almost the same size. Except perhaps for commodity based stocks it is unusual for the 5th wave to be longer than the 3d. If you have to assume anything at all than it would be that the 3d wave is the longest. Effectively that limits any further upside. So does the upper trend-line.

    In the more detailed chart ( I can only get 3 years without paying) the peak value at $60.20 looks like a throw-over, the last gasp of exuberance. RSI and MACD also both suggest a turn is in the cards. This is definitely a sell here.

   For those that have an ACB of a few dollars and are enjoying the dividend income that is more than 3x what you get on a Can. 10-year bond, a different strategy might be more appropriate. That, by the way, goes a long way in explaining the blue chip status.

RDS.A

Hamilton

rdsa feb 6 2015

We were anticipating a triangle with nice big swings up and down. No triangle but a lot of swings. Perhaps the first leg was complete after all even if the stock had not reached its ideal target. We are now assuming that the wild ups and downs (all the oil stocks have this , see HAL,SLB, COP, XOM etc.) are some form of “intermission” or B-wave. These are consolidation phases and the direction continues after that. That is down.

ABX again

Hamilton

abx feb 6 2015

Looks like we just completed a little triangle, always a wave 4. The question now is if this is wave 4 of wave 1 up or just wave 4 of 3 of 1 up. Many others have already doubled from there lows, see DGC below. It is well ahead of Barrick. Once this wave is done, say at $18 or so, a fairly deep pullback for wave 2 should occur. Then up again in wave 3 or c.

dgc feb 6 2015