Year: 2015

G, Goldcorp (in CAN$$!) update.

Hamilton

g jan 6 2015 bg jan 6 2015 s

Goldcorp’s chart is different when looked at in US$$, this is perhaps due to the rapid and large changes in the currencies lately. The top in the short term chart where the number 2 is, is actually 0.11 higher than the top preceding it, technically invalidating the count as shown. In light of the near perfection of the A-B-C wave four (in purple) preceding it we have no qualms about bending the rules.

Here again we have to be alert to the possibility that the drop is not entirely over. A logical target is often wave 4 of previous degree but equally often the target is wave 4 of 3 of previous degree, in this case potentially at $15. This could be accomplished by assuming that we are presently in a wedge shaped 5th wave of C down that still needs it’s 5th wave. Alternatively we will get simple 5-wave sequence down that despite the optics may not have been done yet. Presently the stock is rebounding in what, so far at least, can only be described as a corrective wave 4. At $25+ overlap starts, equality between waves c and a of 4 occurs, and the RSI will move into overbought territory. It will also have retraced about 76% of its value should it drop to about $15.

HGU and ZJG, see also Nov 11, 2014 blog. ABX may be in same camp.

Hamilton

hgu jan 6 2014bzjg jan 6 2015

and shorter term;

Hgu jan 6 2015 sZJG jan6 2015 s

From Nov. 11, 2014, you are up about 25/30% so there is room to manoeuver. At the time we preferred the triangle idea which would have needed a single thrust down consisting of 5 sub-waves. We got that in both the HGU and the ZJG and then started to turn up quite smartly. Now that both those upturns have very distinct signatures that might suggest that they are corrections, 3 –3 – 5 or a-b-c’s we are not so sure anymore. It is entirely possible that there never was a triangle. Instead it might have been a running flat which would imply that the thrust is not a thrust but a wave 3 instead, 3 of 5 to be exact.. We then still need a 5th wave down, either in a conventional 5th wave without overlap, as shown in the HGU chart, or in a diagonal or wedge, also shown in the ZJG chart.

    Gold stocks have performed well recently but very few show perfectly formed initial 5 waves up and therefore some caution is still called for. Below is the chart for ABX;

abx jan 6 2015

Here we have a similar but different situation. There obviously never was a triangle but there was a perfectly clear eight month long A-B-C correction (which, by the way, we caught in real time),  that presumable would have been a wave 4. After such a correction you need 5 sub-waves down which arguable we had in the form of a wedge. The rather feeble  rise from those lows suggest that this 5-wave sequence is not complete. If so we are now in c of 4 and could drop down again. This scenario would be negated by overlap at around $16.50 It could still become a wedge of sorts so the low need not be much below $10.50 or so. You risk a dollar by staying in.

AC, Air Canada (previously AC.A)

Hamilton

AC jan 4 2015

We had a good call in the past on this stock, all though not wholeheartedly. It is by its very nature a terrible business given all the variables of nationalism, monopolies, regulation and high capital costs. Fuel costs are also a large component in the overall operating costs and now that crude has dropped significantly it is assumed that these companies will start making a lot of money.  Pan Am went bankrupt when oil was at around $24 and dropping and using that example it would appear that capacity utilization, or the lack of it, was a more serious critical factor.

    In any event we , potentially, have a clean 5-wave move up from just under a single dollar to the present almost $13. The 5th wave of this sequence is probably not yet complete. It would appear that we are in a minor 5th of 5.  Either way, $13 to $13,20/40 is where the upper trend line runs, depending on when it is reached. Once it has reached these heights it should drop back to $5.13 at the very least. We would not wait much longer to sell. The RSI and MACD confirm that a turn is just around the corner.

There is an alternative and that is that wave 4 ended at the $5.13 level and that from there a large wedge started. This scenario would allow for a rise to about $14, not worth the wait.

ac jan 4 2015 bwedge jan 42015