TCK.B Teck update.

Hamilton

Old charts as of Jan 14, 2011;

tck.b jan 4 2011

These were the two possibilities that met EW rules. The top one that of an irregular B-wave to be followed, as always, by a C-wave to new lows. The second possibility, much less likely, is that of a 4th wave to be followed by a 5th to a new high above that of 2007. The leg up from the 09 lows is very hard to count as 5 waves which would have to be the case if it was a 5th and not a B. Other stocks, such as Vale and BTU have similar structures without necessarily making new highs adding to the B-wave confidence. In any event here is where we are now;

tck.b june 7 2013

The advice to sell at $65 and wait for a target of about $15 looks pretty good now. If you were short we would buy back at today’s $25 rather than wait for a further drop. But, normally, the target for the C wave is below the A waves low!

XRE, iShares S&P/TSX Capped REIT index fund.

Hamilton

XRE june 6 s 2013xre jun 6 2013

Real Estate Income Trusts are, superficially, rather easy to value. They still have the tax advantage of being able to operate on a flow-through bases and consequently they approximate the micro economic model where you buy a single unit and rent it out. Essentially it is a pile of bricks against a pile of debt that results in a return that can then be valued much like a bond. But, last time this REIT ETF hit $18 interest rates where around 5 or 6 % if my memory serves me well. Now that we double top six years later interest rates are at 1%. So theoretically, under the Efficient Market nonsense , these REITS should be considerable undervalued at $18! and even go a lot higher. Instead they drop in a single month almost as much as they rose in the previous 6 months. A mood change perhaps with regard to commercial property which, by the way, unlike stocks, can actually have a negative value under certain circumstances. Expect a lot more to the downside.

FB update

Hamilton

fb june 5 2013

Back in January we recommended a sell on this stock. It was a little above $31 at the time. It has lost about $10 since the and also about 60% of the rebound from September. Nice a-b-c down, perhaps. Or alternatively just a 1-2 etc., no idea so would leave it alone for a while.

COS update

Hamilton

Then, Feb.5 ,2013 and now charts;

cos feb 5 2013cos june 4 2013

At the time, Feb. 2013 we called the triangle (wave B in an A-B-C) structure “plausible”. So far at least, that is exactly what we got so the pattern has become more plausible. It can still go slightly higher but after that you run the risk that this scenario is, in fact, the correct one. Assuming a proportionate drop in the C and A legs (about 50%), a target in the vicinity of $10.50 or so is realistic. You do not have to sell, a tight stop-loss would do equally well! The possibility of “stranded costs” ,a concept raised in this blog quite some time ago , is also becoming a more distinct reality. Unlike Ontario Hydro they will not be able to ding you the customer for that.