Year: 2015

RDS.B , Royal Dutch

Hamilton

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-C 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%!

OIL update

Hamilton

oil april 30 2015

Oil has made it to $59.40 ( now on the June futures contract ), and that is pretty close to the $60 target. Where it goes from here is not perfectly clear but the one thing we do know is that, unlike the Fed. interest rate, it is not going to stay at this level for 6, or more, years. It will move either up or down. Our unsubstantiated bias is still to the downside.

GPRO update

Hamilton

GPRO april 29 2015

GPRO did not get enough attention. When it got to about $45 (where the 3 is) it could have completed an initial a-b-c down. However it continued lower and in March reached the level of wave 4 of previous degree AND about 62% retracement. The timing was also near perfect as the lock on the IPO stock was removed around the middle to end of February.  Clearly that was a significant low so a rebound was to be expected. We are getting exactly that. The other day there was even a nice gap. We are guessing that this is just wave a up of what will become, perhaps, an a-b-c rebound. The a should stop around the 200 day moving average, roughly $57 or so, then the b should erase about 1/2 of that, about $10 to $45 or so. Then the c can take it up to around $70. That would be the tradable move that we would wait for, provided things unfold as we expect.

     This stock must have read the book on EW as it is behaving accordingly. The ultimate low may be around the issue price of $24 or even lower but that is of no concern for the tradable leg we have in mind. This time we will keep an eye on it.