MSFT, Microsoft update

Hamilton

msft sept 4 2013 bmsft sept 4 2013 s

The only thing that was always perfectly clear was that Microsoft traced out a two year long triangle. Given the size and duration there can be little doubt that this is a b-wave, the pause in the middle so to speak, except that the middle is not necessarily in the middle. At one point we therefore assumed the whole thing was complete at about $33 and that the stock would drop. It did, but not as far as expected. Now there are two possibilities. Either the stock is doing an a-b-c X a-b-c (double zig-zag) or a simple a-b-c, both from the lows. If the former applies the stock has seen its best. However in the latter case the c-leg should subdivide in 5 waves itself and probably as a wedge. This would allow one more high near $38 where the trend line of the wedge intersects with the double-top line. This could take about 1/2 year to complete which does not fit the overall outlook very well. Best way to play this is with a tight stop just below the lower wedge line. Should the stock manage to get back > $34 we would sell. Fundamentally people wondered where the growth would come from. Now with the Nokia deal under the belt people may conclude that growth is finnished.

NOK, Nokia update

Hamilton

The usual then – Jan 10, 2013 – and now charts;

nok jan 10 2013NOK sept 3 2013

Nokia has entered the anticipated range that we indicated eight months ago. If you bought at $3 you will almost have doubled your money. If you bought at a lower level you would most certainly have done so. The stock gapped up today on the news of the sale of one of its products, if that is the word. It will probable try to inch higher in the next few days. Again the bird-in-the-hand-etc. adage applies. Suffice it here to say that the “normal” retracement level is near the top of the triangle.

F, Ford update

Hamilton

f sept 2 2013

Ford did precisely as expected a month ago (see that blog), completing the b-wave in a small a-b-c wave 2 and starting its descent. For the moment that is a preliminary conclusion but it definitely looks promising. We are now in the first leg of wave c down which should take at least a year but perhaps a lot more and take the stock back to below $8 and , more likely, in the vicinity of $5 or lower. Such a deep retracement is perfectly normal for a wave 2. Once wave c is complete, having traced out 5 sub waves, Ford will be a buy again. Don’t wait for it!

FTSE , Footsie update

Hamilton

FTSE aug 31 2013

This was that other, recent, coincidence. Whatever. In the mean time the London stock index retraced about 76% ( all retracements over the past 4/5 years have been unusually large), but unlike with the DOW , no new highs were made. That being the case we will now assume that we are in the initial stages of a wave 3. As wave 1 was about 900 index points , wave 3 could take the index down by 1.62X that or even 2,6X. (1440 or 2340 point). If any of this happens we will be halfway there. See Bloomberg chart below.

ftse aug 31 2013 b