Year: 2015

ECA, Encana update

Hamilton

Then, July 24th, and now charts;

eca july 24 2015eca nov 1 2015

Using the Bigchart we estimated a bottom at about $7 using three different metrics. The actual low was at $7.39. From there it nearly doubled and, so far at least, the bounce looks a lot like a simple a-b-c, that is a correction. A new low might still be forthcoming.

Markets have an uncanny tendency towards symmetry and regardless whether this is a 5th wave in a diagonal or a 5th wave in a normal sequence, for symmetry to apply the stock should drop $1,13 below this last low which would bring it to $6.26  Don’t bet your last dollar on it but do expect another new low.

VRX update

Hamilton

vrx nov 1 2015vrx oct1 2015 s

FROM THE RECENT PAST,

Valeant Pharmaceuticals Intl Stock Rating Reaffirmed by RBC Capital (VRX)

October 20th, 2015 – 0 comments – Filed Under – by Faye Duncan

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Valeant Pharmaceuticals Intl logoValeant Pharmaceuticals Intl (TSE:VRX)‘s stock had its “outperform” rating reiterated by equities researchers at RBC Capital in a report released on Tuesday, StockTargetPrices.com reports.

Shares of Valeant Pharmaceuticals Intl (TSE:VRX) traded down 8.74% during mid-day trading on Tuesday, reaching $194.42. The company’s stock had a trading volume of 770,893 shares. The firm has a 50-day moving average of $266.05 and a 200-day moving average of $283.41. The firm has a market capitalization of $66.64 billion and a PE ratio of 80.64. Valeant Pharmaceuticals Intl has a 52 week low of $140.61 and a 52 week high of $347.84.

Separately, TD Securities dropped their price objective on Valeant Pharmaceuticals Intl from C$300.00 to C$285.00 and set a “buy” rating for the company in a report on Wednesday, September 30th.

 

We have talked about this before but things are getting ugly fast so it bears repeating. The guys at Citron are now labelled as the villains because it is they that spoiled the party for not so altruistic purposes. The talk is that “regulators” should have stepped in and put a halt to all these false (??) accusations and innuendo. There is, however, a legal defence as in suing for defamation. It has the charming attribute that unlike in most legal matters, the accused party is assumed guilty until proven innocent.  Between deep pocketed corporations this does not matter that much but not so when one of the parties is the little guy. In those cases it usually boils down to an act of extreme cowardice aimed towards muzzling the opponent.

In all cases the truth is ultimately the best defence and invariable when there is a cockroach, more are found as time moves on. Those that do the opposite, that is recommend these stocks wearing blinkers are never faulted even if, in the eyes of any prudent person, such recommendations border on the ridiculous. Above are two such recommendations from the two largest and highly respected trading outfits in Canada/US. This is not surprising as they themselves often cause the lofty levels in the first place. Like horses, that are so afraid of their own shadows, particularly when in traffic, they must wear blinkers that blind them to reality and keep pushing the “narrative”.

We had an initial bounce off the lows for VRX and at this point it is hard to tell where the stock might go. Longer-term, that is over the next year or so, we think it may go lower to about, perhaps, $55 or so. There is no complete 5-waves down let alone an a-b-c correction so there still is something missing. RSI and MACD, as well as a nice cross-over point towards the upside but, as always, discretion is the better part of valour.

Ironically Ackman’s Pershing Square hedge fund reportedly has 30% invested in VRX. He is the same guy that aggressively shorted Herbalife (HLF) on which he also lost a fortune. What goes around, comes around. There are 131 hedge funds holding about 32% of VRX stock, herding maybe?

EEFT, Euronet

Hamilton

eeft oct 30 2015

This company has been around since the late eighties and has it’s origins in Hungary of all places all though it is incorporated in the US. A good part of it’s business involves money transfers and FX transaction. It got a solid boost when it was able to muscle out Western Union (WU) and Moneygram (MCI) from their partnership position with Wallmart in 2014. If this sort of stuff tickles you pink then buying these shares in the past year or two would have netted you 1 to 2x your money back plus the original investment, compared to perhaps losing it all.

   We do not like the stock anymore. 1. we are in the pure vertical stage, 2. it is possible to count a clear 5 wave move up from the lows of 2009, 3. the RSI is once again approaching the 80% level, 4. even though we are not quite there yet this stock is doing a heroic Mnt. Everest climb which would ideally take the stock to 100 but not necessarily, 5. the p/e is trading at a lofty 46x, about 3x the norm, 6. the business is quickly becoming commoditized. Every Tom, Dick and Harry is getting into the business and there were already too many players.

Definitely a sell here and certainly anywhere between here and $100. A reasonable first target is either $45 or $36 or so.

Note: We are confident that 5 waves up are complete or nearly so. Even so we are open to the idea that wave 4 might have occurred a little later in the sequence than shown, that is starting at $55. This would become more compelling in the event that the stock does, in fact, manage to climb to $100.

GPRO update

Hamilton

The usual then, April 29, 2015, and now charts;

GPRO april 29 2015GPRO oct 29 2015

We were asleep again and did not look at this stock. See our previous blog. Recently we got the rebound level in both the Dow and the S&P dead wrong so it is heart warming that we did get this one right. That is so far at least. The then suggested target of $24 may, however, be way too high. $5 is a possibility if both A and C legs become equal in size. It appears that we are in a 5th wave of C which should take the stock to about $20 as a minimum. Time will tell.