Year: 2015

RDS.B, Royal Dutch update

Hamilton

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!

AU, Anglogold Ashanti update

Hamilton

AU june 16 2015 bau june 16 205 s

Last time, March 8th, we were still a little bit on the fence with regard to where this stock could go. Now we are prepared to take a stance in favour of going long at a price below the most recent low of $8.43 and above the December low of $7,45 Given the relative size of the last two down legs we must assume that they are both part of an a-b-c correction of the initial up wave in a new bull phase. In short, this is a buy at <$8. The initial target is at $13 and then at $20. If I was a good salesman , something nobody has yet accused me of, I would point out that your gain would be about 20% greater than this as this is in American Dollars!

AIG, American Intern. Group

Hamilton

This “insurance” company started life in the Far East. It’s founder was a Cornelius van der ….., Dutch in other words. Around the 2nd. WW the company moved to the US. It operates everywhere and insures just about every S&P 500 company as well as half the people that are on a Who is Who list. In short, they are big and everywhere. They were also the biggest private corporation to receive a bailout package, totalling a little over 200 bln. They pushed the envelope in every direction particularly in the area of derivatives, credit-default-swaps and so on. They were a counter-party to every bank that counts and also to Government sponsored enterprises such as Fannie May, Mac etc. After the great recession they continued to behave rather badly  in terms of paying bonuses, share buy-backs, palace revolutions etc. Here is the BIG picture;

AIG june 16 2015 l

The shares never actually traded at $1500: that price is obtained by adjusting for various reverse stock-splits. The action after 2009 is barely discernable so we have the more detailed chats;

aig june 16 2015 maig june 16 2015 s

From the low in 2009 it looks like the stock traced out an a-b-c corrective rally. The c, as far as we can tell, subdivides neatly in the required 5-waves and has the added bonus of what might be an expanding triangle in the wave 4 position. Also, wave 5 is now equal to wave 1, a common occurrence when wave 3 is extended,as it is. That 5th. wave has all the attributes of a wedge, including a nice throw-over to end it all. We are sitting right on the upper trend line and both the RSI and MACD are stretched to the limit. In short, this is a sell.

There are some relatively cheap options available, such as 65 strike in August for about $3.50. We would prefer options as there is an OUTSIDE chance that we are looking at a take-off situation, i.e. where we are at the start of a third wave. We would put that on a par with Donald Trump becoming the next Fed. chair.

JMAT, Johnson Matthey update

Hamilton

JMAT june 12 , 2015

On June the 8th, using a June 1 chart we suggested selling this stock. From the June 1 date, 12 days ago, it is now down about 12%. It is hard to see but as far as we were able to determine the actual top was in late January with the recent top just ticks below that. If correct that would make this sharp drop a wave 3 of 1. There is a long way still to go but in the immediate future a bounce should be anticipated. Sharp and sudden drops like this occur when a stock trades well above it’s value, driven by momentum. If the mood changes there is literally nothing to keep it up.