T, Telus

Hamilton

Telus has always been rather volatile. Here are the charts;

t 2011 1 t 2011 2

Long before the latest “depression” this stock had been decimated, only to rebound like a phoenix from the ashes. Call that waves 4 (a perfect a-b-c ,  5-3-5 structure) and 5 , most certainly a 5-wave move albeit one that follows the 1-2-1-2–3–4-5-4-5 pattern. Then we get the correction of the entire move, probable to unfold as some sort of A-B-C (this one is of one higher degree than wave 4!).

In greater detail we get;

t 2011 3

Notice the beautiful wedge like structure from $48 down to about $30. This are always 5th waves so we knew A was complete. We also knew Telus should trade back to the $48 level, which , as it happens is pretty close to the 62% retracement level. Now, so close to the target we suggest stepping aside. For completeness I have added the old blog from Feb. 2010 below. The target then was the same $47.

T feb23

RUS, Russel Metals

Hamilton

rus 1 rus 2

Another B-wave?, they seem to be a dime a dozen. Perhaps the market is telling us something. Just like most everything seemed to be a buy back in the spring of ‘09 , now almost everything seems to be a sell. Russel Metals is not quite as obvious as many of the others, but it does happen to be in a category that has undoubtedly been a big beneficiary of the China story.  This B-wave is a little bit of a stretch, the megaphone in the middle is less than compelling, but it could just be a simple flat which fits almost as well. The C=A is close enough and both the RSI and MACD have been on a downward slope for almost a year. Furthermore we are pretty well at the 61.8% retracement level.

PGF Pengrowth

Hamilton

PGF

One of the best energy companies and one that has traded for the longest time as an income trust. Just to complete this B-wave series note that this one meets most of the requirements. First C=A and C and A are almost equal to B as well. Secondly we are at a 50% retracement. Thirdly the RSI and MACD are dropping. The only fly in the ointment is that we have not (yet?) reached the upper trend-line. but we did reach the level of the 4th wave of previous degree.

SAP, Saputo

Hamilton

sap big 2 sap big1

Sometimes EW is very ambiguous and at other times it presents itself as on a silver platter. The chart on the left has 5 waves up, as clear as a bell, but if you extend the time frame (as far as I can with Bigcharts), things are less definitive. Waves 2 and 4 (in purple in the left chart) are both zig-zags which is not impossible but is very unlikely to be correct. A little tinkering gives us the count on the right, here both waves 4 are zig-zags but they are of different degrees so the guideline is not violated. So much for EW niceties, either way this thing seems to be topping and is most certainly trading well above its average over many years (roughly purple line on the right). A drop back to $25 or $ 20 is entirely realistic. Again when wondering “how high is high”, the answer is simple; this is high.

A more detailed look ore or less confirms that opinion. Here is the short-term chart;

sap 3

At first blush this looks a lot like a B-wave, except that it has gone beyond what one would normally expect. B-wave (green) or 5th wave (black) matters very little,at least for the next big move. Notice that both C and A in the B-wave are equal plus a little. in a 5th wave this would make the 5th equal to 1 and 3 combined, also very common. Both RSI and MACD are dropping. Time to apply “by low , sell high”.