AMGN, Amgen update

Hamilton

Then and now charts, then is Dec 13 2011, half a year ago;

amgn 13 dec 2011amgn 7 jul 2012

At the time we pointed out that we preferred the upside resolution of this triangle, but if wrong the stock could go down equally fast. This triangle is a B-wave triangle in a wave 2 correction. The target indicated by the arrow is a little above $80. We have changed the internals of the triangle by lengthening the c wave as otherwise the e wave would drop below the c which is impossible. This also had the effect of delaying the thrust up by a week or two. Otherwise it is pretty well as predicted. The high of $75.17 is close enough, certainly now that the thrust itself appears to have the necessary 5-waves. This is how it all fits the big chart;

amgn jul 8 2012 l

This is an instructive chart, as we have a triangle in the 4th wave position followed by one in the B-wave position. Notice that the patterns overall are very similar. For those that are interested in such minutia, we point out that the first triangle could just as easily be a 4th wave correction followed by a “wedge” that has a very small 5th wave. Also the A wave down can be viewed as either a 5 –wave affaire or an a-b-c. The first would suggest a zig-zag and the second a flat. We are already close to double topping so a flat looks better. The end result should be an A-B-C correction in which, and this is quite common, all three legs are approximately equal as vectors. The target is about $35/$28. A 61.8% loss of the entire value from the top is around $31, about the middle of that range. Sell if you own it.

AA Alcoa

Hamilton

aa jul 2012

Alcoa did continue to drop as expected, but at a snails pace. Essentially it spent 8 months triangulating and going nowhere. At some point it should still trade below the $6 level. it still sports a p/e ratio of about 24 so from that metric’s point of view that is not unreasonable. Here, once again , is the big picture. The company is reporting next week.

AA jul 2012 b

WTW, Weight Watchers International

Hamilton

wtw jul 2012

Not at all sure if Fergie is still promoting this company. Doesn’t matter as this should sell itself. This is one of the true “growth” stocks, or at least it should be. In the US some 41% of the children are already obese, it is a calamity that is happening everyday and accelerating. Demand for these services should be growing exponentially. Apparently the Chinese, usually lean and mean, are starting to suffer from obesity just as much as the West. So the above bullish outlook may, surprisingly, be correct. In detail:

wtw jul 2012 mwtw jul 2012 s

$45 is a best guess for a low (or temporary low). 1. The a-b-c is complete at that point, 2. A gap on the way up is closed, 3. It will have retraced either 50% of 3 or 62 % of the whole thing and 4. This is a growth stock, literally.

Use a stop loss a few dollars below, just in case it does what INFA did today. Should the trade work, we would not stay with it beyond, say, $65

STJ, St. Jude Medical

Hamilton

stj jul 2012

St. Jude is following the EW script quite conscientiously (see previous blogs). Ultimately we are looking for a low of $24 or less. For the moment two scenarios present themselves as plausible. The green one is initially fairly bullish which is why I would prefer the purple one by a large margin.