RDS.B , Royal Dutch

Again the then, Dec. 14,2014, and now charts;

RDS.b dec 14 2014RDS.B april 30 2015

It has been almost 5 months and this stock has not (yet?) reached its ideal target at around $59 or a little lower (Big charts does not always show the daily extremes!). So what is going on, if anything?

rds.b april 30 2015 s

There are a number of possibilities. First this may not be a 5 wave sequence down. Instead it may be an A-B- correction (or partial correction). The C appears to be taking the shape of a wedge. Approximately the same result can be obtained by assuming a series of 1-2’s of different degrees to be followed by two 4-5’s at the bottom. Note that the structures from Dec. to mid Feb, and the one from mid March to now, are identical which supports that idea.

If it indeed proves to be a wedge the rebound target is raised to $74, so if you own it as per the last blog there is no need to sell. However, if you do not own it yet, wait till it gets a little closer to $59 again and then buy it. It earns a dividend of about 5.8% per annum, regardless of whether you chose to receive it in Sterling or hard Dutch Euros. Amazingly that percentage is the same for either currency but the tax treatment may not be! If this works you would have a total return of about 20%+3%=23% in six months or less. Talk to your broker.

P.S. According to latest earnings report earnings are down by 56%!