IFF, update

IFF jul 2012

Exactly a year ago we suggested that this was a sell and even though , at certain points, it was down by almost 20%, it has done essentially nothing except, perhaps, frustrate both bulls and bears. The 1-2, 1-2 count, which includes a failure for the top, is little more than a wild guess. One can easily substitute a simple a-b-c and come up with only a single 1-2. the important thing is that the stock has been range bound for more than two years now,so the odds still favour the downside. (see previous blog).

IFF, International Flavors and Fragrances.

This is a 5bln cap. company that is, as the name suggests, involved in specialty chemicals. It earns a dividend income of about 1.8% and presently trades at a p/e of 18. Here is the chart;


Everything about this chart points to a large “flat”, that is an A-B-C where the legs are about the same, here successively bigger, without the stock making any headway.  The typical subdivisions are a-b-c,a-b-c,1-2-3-4-5. We just started 1 of the C wave. This scenario would ultimately result in a loss of about 60%.

There is an outside, very improbable, bullish alternative (in red) that views the recently completed up-leg as wave 5. Even in that bullish interpretation a loss of 40% is still a logical outcome. Both can be avoided by selling now.