PD Precision Drilling

Hamilton

 

pd.un feb2

This is Precision Drilling’s chart as of Feb 1 2009.  We argued that it was a buy then at around $5 given the nice 5 waves down and the buy low/ sell high principle. Below is today’s chart; for some reason I never looked at it in between.

pd march 2011

This is, by the way, a semi-log chart, sometimes they capture the essence better. This is an a – triangle b – c correction shown schematically. Notice theat time-wise is is very much overdue. Presently it is at the 4th wave of previous degree (my original target) but will probable push higher towards a 50 to 62 % retracement level. That is around $18.

ABX

Hamilton

Abx mar 2011 abx apr 2011

On the left last months take on American Barrick. Of course it did not work out exactly that way. As is all too often the case lately,  the “market” manages to use every excuse to delay and frustrate as many people as possible. What looked like the end of wave 2 (or B) proved to be just the a leg of a more complex correction, delaying the inevitable by a whole month and adding only a fraction of a dollar. In the meantime RBC had announced it was a buy and gold kept making new highs. But the company itself gave the impetus for a ride down, a little bit like Mercedes Benz taking over Crysler. Rather than stick to its knitting the company has decided to branch out into copper miming in a big way.To accomplish this they are upping the bid on Equinox and are now at a level where even the Chinese are unwilling to play.

Overpaying for an asset is all fine and dandy, except when gold companies are normally valued at 10x cash-flow ( for whatever reason ) and copper companies at only 6x. Assuming the deal is accretive from day one and that the market will go for the middle of the range, that is 8x, the stock should find its way to $42 easily and then on to our original target of $36.

MAT, Mattel Inc.

Hamilton

mat b mat

Among other things , Mattel makes the Barbie doll which is a must apparently for any girl in North America.  She, the doll that is, broke up with Ken many, many years ago but recently Ken was reincarnated and they are back together. Not a bad marketing ploy but the question now is how long it will last. By the looks of the chart , not very long. The stock has essentially been in a 10+ year corrective mode, tracing out a fairly clear A-B-C.

The 2 year chart has two very distinct triangle formations in it, likely in the wave 4 and 4 of 5 positions. this pretty well guarantees a sizable pull back is just around the corner.

TCK.B Teck Resources Ltd.

Hamilton

On Jan 15 we thought this stock had peaked at $65 and should be sold, here are updated charts;

tck apr 2011 tck apr 2011b

We still are of the opinion that the last move up was NOT a 5th wave but a B-wave instead. This fits much better with a whole lot of other stocks (see also FM). The implications are not much different either way, except that the downside target may be a bit  lower than in the case of a triangle (rather unlikely)

tck apr 2011 sm .

In the mean time the stock has dropped almost $20 ( 30%) in what would be a first wave. After that it may have completed an a-b-c or perhaps only the a-b part with c still to go. By the time wave 3 is done the stock should be close to $30.