Just as with AMD (see previous blog) we made the exact same mistake with Canadian Tire in thinking that the stock was ripe for a fall in late 2010 at about $68 or so. It too did oblige by dropping about 30% but then it rebounded and made much higher, new highs above $90 by essentially double topping. Here is the chart;

We know that the move up  from the ‘08 lows is most likely a B-wave. A 5-3-5 structure with both the A and C of approximately the same length. This leg could conceivable grow a little longer but it still would not be a 5th wave; that is impossible as there is already overlap between wave A and wave 4 and this entire structure seems a little off to be a diagonal. This one is ripe for a fall any moment now. The RSI and MACD tentatively support this view.

Here are 3 charts, large medium and small, there is nothing more to say;

Except that wave 1 seems to be missing, but then wave 5 is pretty robust.

Wave 1 down in the medium term chart is a fairly rare type 2 wedge, but it is well formed which makes it more credible. A sell of course.