This is high up in the mountains, some 4000 meters or more. There are glaciers next door.
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FCX, are we there?
Here are the usual then, Jan. 19 2012, and now charts;
Freeport is our favourite copper (and the largest goldmine by reserves) mining stock. Back in 2012 (see the blogs) we had a rough target of $10 or lower. This was not based on any particular prescient view on the price of copper in the future, nor was it based on the prospects of the housing market in China. Also we were blissfully unaware of huge copper finds like Ivanhoe in Mongolia or one or two others in Chile. Also as they were tearing out copper piping all over North America we did not know that copper would essentially cease to be used for home construction. What we did know was that there was an absolutely perfect example of a B wave in the chart. They are followed by a C wave down to, usually, a new low. That is exactly what we got.
So are we there? Judging by copper the stuff we are certainly close (see recent blog). Looking at the chart in more detail it is safe to assume that the drop from $38 or so over the past year and a bit is all a 5th wave. (C waves must be 5-waves!), either a straightforward one or a wedge of sorts;
As you can readily see, we are less than $1 away from the trendline (this is log-scale!), in fact we may already have done enough. Copper hit the $2 precisely. The RSI and the MACD on the stock are already acting positively. Somewhere here, soon, this should be a buy. Below is a picture showing the size of this thing; Sorry, it does not fit, see next blog.
COS, Canadian Oil Sands update
The usual then, Nov. 2010, five years ago, and now charts;
On the left our expectation back in Nov. of 2010, bases on EW and supported by the fundamental view that there might be “stranded costs”. On the right what actually happened with that same expectation in a schematic form entered into the chart in green. Interestingly time was where things went wrong but this is known to be the Achilles heel of EW. All in all it took 4 years longer than expected but who could have known that the Fed. would run such a completely misguided, bull-headed zero interest policy for so long.
We are not there yet and with the takeover we may never get there. However if the shareholders/management persist in not wanting to face reality, it may happen yet.
GPRO revisited
We thought that a couple of dollars under $20 might suffice. It did not. Monday the stock made a new low at $16.50. From roughly $100 that is a loss of 84%, without using a calculator.
This is an A-B-C down. Often the A and C legs are equal as vectors (that is direction as well as magnitude) which could suggest that the low might even be at about $12. We have a gut feeling that that may be too low. Here are some , more objective, reasons.
1. Despite two or three downgrades the average target with 15 analysts is still at $33.
2. The p/e is at a modest 14 and the company has no debt.
3.Short positions amount to over 31% of the company’s float –the issue price was $24
4.RSI and MACD suggest a turn is around the corner.
5. Marketing by this company is terrible, just a few tweaks could result in dramatic improvements.
6. There are rumours that the company is an excellent take-over target, perhaps by APPLE. Where there is smoke there is fire. The capitalization is about 2.3 bln., pocket change for AAPL.
7. The C wave subdivides into 9 separate waves, equal to a 5-wave move.
In short our gut tells us this stock could double overnight. That possibility far outweighs the potential of another $4 down.