RDS.B, Royal Dutch update

rds.b june 17 2015 5yrds.b june 17 2015 1 y

Often the best results are obtained when you observe the creature in it’s normal habitat, in this case pounds, shillings and pence. These charts , a 5 year and a one year, are from Bloomberg and include part of today’s trading. You may recall, now months ago, that we were anticipating a triangle together with the usual erratic swings up and down. Technically speaking we never actually got that, at least not when measured in US currency. However when measured in Sterling we got exactly that – we show just one but point out that a longer one is also a possibility – and at 1875p this morning we are about 75p away from the ideal triangle measure at roughly 1800p, which also happens to correspond with the low in that other triangle on the way up. The top, by the way ,was at 2599p.

rds.b june 17 2015 sc

In US currency, using the ADRs as a proxy for the stock, we do not have this triangle but we do appear to have a diagonal triangle, that is a wedge. One more brief low would complete this structure so we continue to recommend this as a buy. The potential is for about US$13, or 500p to the upside! That would, in our opinion, be wave B in a large A-B-C correction so we are not recommending that you get married to the stock. Just in case you try to figure out the exchange rate and conclude that it is wrong, keep in mind that the ADR represents 2 shares and not one!