BBD.B, Bombardier update

Hamilton

We have been speculating that this stock might be on its way up (see 7 previous blogs).Today I heard nonsense to the effect that the production of the new plane may be delayed, sort of like with the Boeing “Dreamliner”. It seems that the market, whoever that might be, has a problem believing that these things can actually be made in Quebec. Here is an updated chart;

bbd.b jul 2012

From the Globe & Mail. The big drop was a zig-zag A-B-C from $27 to $2, or 93%. Certainly qualifies as a bear market. Subsequent to that the stock rebounds in a clear 5 wave move AND then does a clear correction which may not be quite finished. All the time the stock stays above the critical blue line connecting all the lows. A stop at about $2.75 would be appropriate if one decides to go long Bombardier.

MAKO,Mako Surgical Corp.

Hamilton

mako b 2012mako s 2012

Two counts possible but the one shown, in both charts, is the preferred. The reason is simple, the B-wave, shown separately in purple, is near perfect which strengthens the view that it is not a 5th wave (the alternative count). The whole structure is a “flat” 3-3-5, or a-b-c, a-b-c, 1-2-3-4-5. The stock has only existed for a few years so presumable this is all of wave 1 up, followed by wave 2. Typically waves 2 retrace very deeply into the gains of wave 1. This one has done over 65%. The company makes robotic non-invasive machines for ortho-whatever , knee surgery. They reported a 66% increase in surgeries done with their equipment but also lowered their expectations with regard to sales, for a second time but not by much. There are 42.5 mln. shares with 32% held in short positions, an unheard of proportion. Goldman Sachs, conveniently downgraded the stock yesterday from “buy” to “neutral”, a change in target from $36 to $17. Should we assume that therefore they did not hold any short positions?? Jim Kramer passionately hates the stock, citing the cockroach theory.

Someday, in the not too distant future, this stock should trade at $27,25 which would constitute almost a 50% increase. Short of a minor 5th of 5 of C, this should be a buy. The rebound could be rather violent if the shorts try to find an exit. As always consult your broker!

P.S. Now that the day is over, maybe the missing 5th of 5 of C was added to take the stock to a $13.80 low. From Bloomberg;

mako vs jul 2012

JAG, Jaguar Mining Inc.

Hamilton

jag b 2012jag s 2012

Jaguar Mining did something very similar to NKO. They are gold miners in Brazil, Minas Gerais. Their board of directors reads like Who is Who in Canada. Has not been much help. Once you are this low to ground level there cannot be that much to go. For what it is worth, it may just need a small additional wave down. They have too much debt so it is not clear if it will ever get off the ground. We show it for it’s perfect EW pattern.

NKO, Niko Resources update, a tentative buy.

Hamilton

nko b jul 2012nko m jul 2012NKO s jul 2012

Last time we looked, about a week ago, it was virtually impossible to tell if this stock had in fact completed the C-leg down in 5 waves. Today we cannot be sure today either but there is some constructive new information. First the RSI and the MACD are both at three year extremes. The count is five waves and hits the lower trend-line if you use the April rather than the August 2010 high; April is the actual high. Lastly, the short-term chart – I can only get 10 days! -  could be counted as an initial 5 wave move followed by an a-b-c down. This does not exclude a normal corrective rebound but it could also mean that a new bull was born. A logical first target would be about $42 . A stop at around $12.25 should be used just in case we have not seen the lows yet.