Month: March 2016

SLB, Schlumberger N.V. update

Hamilton

SLB mar 24 2016 bslb mar 24 2016 s

You did not know that Schlumberger is a Dutch company? Well it is, at least for tax purposes.

We are concerned that SLB suggest that oil could go down further, perhaps after a period of sideways action. From the big picture it is perfectly clear that we are looking at a “flat” that is incomplete and can still easily go to $40 or beyond. In fact it is  a classic flat without any warts at all. Therefore this C wave should unfold in a 5-wave sequence pretty well straight down. To date we can only count waves 1, 2, 3 and (part) of 4. There is still more of 4 to go and then 5. Already there is a possibility of overlap between waves 2 and 4 which should not happen. This can be explained by assuming a triangle is in the making as wave 4. In EW there is a school of thought that where overlap occurs with a triangle, it is not the extreme that counts but the value at the apex or e-wave of that triangle. Technically then there is no problem and we should expect a 5th wave at some point between now and a year from now. It is highly unlikely that this should happen without oil itself also getting hit. See also the oil blog.

NWC, North West Co.

Hamilton

NWC mar 24 2016 bNWC mar 24 2016 s

This  storied company is a retailer that does much of it’s business in the North West presumable. Chances that you would actually own the stock are relatively slim, but for the few that do this may be worth taking note of. Long-term we have , potentially, a clean 5 wave sequence up. Short-term we have a classic diagonal which is always a termination pattern, in this case a 5th wave of 5. On top of that it is very reliable or predictive. The stock should return to the base of this pattern at the very least. From here that is about $10 or roughly 30%. A much more likely target, wave 4 of previous degree, is at about $13 so we would definitely sell this stock.

Originally this was a competitor of the Hudson Bay Company. At some point they merged and in 1990 the name was revived  again as a separate company. The long-term chart above therefore covers most of the company’s life.

HSI, Hong Kong index update and review.

Hamilton

HSI march 24 2016

 

We have been rather prescient with our calls on this index and , and by extension, the Shanghai index as well.  So a review of the EW reading for this index might just be appropriate.

Our big picture take on this is that the index made a B-wave high last year and is now falling in wave C which should take the index down by about 2/3d’s, to the 4th wave of previous degree or even the 4th of 3 of previous degree, and, as is often the case, to a level that corresponds with C being equal to A in the “flat” A-B-C.  All of those things are somewhere between 1000 and 800 on the index, all three of them, so they form a nice cluster. Moreover we already seem to have broken through the lower boundary of the 40 to 50 plus channel that has contained this index for most of it’s existence, the only clear exception being the 2008 peak. A swing to the other side now would not be an unreasonable expectation if you think of the pendulum overshooting the lower boundary by a similar amount, more or less.

In short we remain as bearish as before even if we are not entirely sure of the short-term EW position of this index, that is is it wave 2 of 3? or are we still in wave 2 of the 5 wave sequence that wave C should follow? In any event, I doubt that the index will be able to re-enter the channel, roughly at about 22500. Before that 21000 if exceeded, would cause a number of overlaps that are highly unlikely.

ACQ, Auto Canada update

Hamilton

The then, Jan 30, 2015 and now charts as usual;

acq jan 31 2015acq mar 21 2016

As you can see, and I do confess that there are more blogs that you may wish to look at, we were a tad on the early side on this stock but by selling at that time you would have lost an opportunity to make , perhaps 10 or 20 dollars more, but you may have saved yourself 40 or 50 dollars as well. In any event this is a double zig-zag. All corrections are essentially A-B-C which is often a zig-zag if it is straight down. Then the whole process repeats, sometimes even twice. That is how you get the double or triple zig-zag. There are never more than three!

So, for the moment at least , it looks like $10 might be the next target. Keep your eye on the RSI.

Sorry, but my graphic designer is away on vacation.