Like so many of these stocks they have not done very much lately. MMM, WMT, PFE, JNJ etc. etc. seem to be oblivious to the world around them. This one has not moved for 7 years or so. But it also has not gone beyond $75. Next big move should be towards $45.
After today’s idiotic 300 point move on the TSE, the predictions on this stock are now increasingly more plausible. Check previous blogs, but the story essentially was that it could not go lower than $22.50 and even at $25 should gain some $8. I am myself always amazed how accurate this stuff (EW) often is. I cannot afford detailed tick charts so I assume that wave a was a 5 wave move. Wave B to about $26 as predicted occurred yesterday. Wave C probable completed wave 3 of C and will have a minor pullback in the morning followed by the 5th. That should take it to the anticipated $32/33 level. $8 on $24 is roughly 30% absolute. but as they say in Holland, don’t sell the skin before you shot the beast. Anyway a sell at around $32. For the sake of a good understanding, that does not mean that the stock cannot go to $300, whatever, it is just not the thing we understand at this time.
What farmers have known for ages, most brokers do not know. Just as there is a time to sow, and a time to reap, there is a time to buy and there is a time to sell. Stockbrokers have this notion that every second your money is not invested you miss out on this lucrative journey guided by his or her investment acumen, so the right time to buy is when you have the money. Conversely there really is never a good time to sell as stocks are assumed to be on this constant upward trajectory. Only when the crop is rotting in the field and the embarrassment becomes too great will the broker sell (and , of course at the end of the month when there is a need for food on the table). We believe that the best way to make money, presumable that is the purpose of the exercise, is to be rather circumspect about both the buy and the sell. There are 560 different entries on this website, some individual stocks have as many as 40 entries (RY) so it is near impossible to keep track all the time. That is why I like to work with a “first”, if it reaches that you either sell or are on your own (if not stopped out).
Dell is a good example where both sides worked. For whatever reason (see previous blogs) we recommended buying Dell at about $12. A week too late we noticed the triangle and immediately suggested a sell. So far you are up $5 (or $10 if you also short)on a base of $12. If your broker is like the one described above, you have made absolutely nothing.
We correctly (within a single dollar) anticipated the high point of the “right shoulder” and the subsequent drop (so far at least). So it is a good time to have another look. In EW terms the Great Recession drop was wave A, the very large rebound wave B that did not double–top by a mere $5 or so, and now we are in wave C. Wave C should unfold in 5 separate waves so that the entire structure becomes a flat, which, as the name more or less suggests is a mostly sideways structure which subdivides as a 3-3-5. The C-wave, more often than not is the longest, perhaps as a result of the investor having to go through the same humiliating experience twice, usually having learned nothing the first time which gives the structure a slightly downward skew.
EW , which, for the most part, is pattern recognition does not use the H&S pattern as such. It, the H&S pattern, has its origins in the DOW theory, but a pattern is a pattern and the predictive value is recognizing it before everybody else does. Using this in the above chart we have draw the “neckline” horizontally at about $35. Neckline is a bit of a misnomer, armpit line would describe it better. In any event that is the level of support, when it is broken there is a void underneath and the stock should drop by an amount equal to the amount the head sticks out above the neckline. In this case that is at the $20 level. EW has the point of recognition which is where the bulls realise that the are barking up the wrong tree. This point usually lies at the mid-point of the 3d wave. Whatever approach one prefers, all hell should break lose at about $34. Add it all up one should look for a target between $20 and $10 and a time of arrival between early 2013 and 2014
For those that are interested, it is possible to scroll down two blogs and enlarge the chart of the TSX60 Capped index. It can then be dragged up (takes a little dexterity) and then put next to this chart when that too is enlarged. After playing around with those two charts for a little while one is tempted to conclude that Canada too is an emerging market, or alternatively and more kindly, that the world has become one.