Month: August 2010

MDA, McDonald Dettwiler

Hamilton

MDA

This is a fascinating company, not just for it’s businesses but also the performance over the past 5-years. At a glance it is obvious that the stock double-topped just recently at about $50; always a good time to step aside if just temporarily. On closer scrutiny the last up-leg – from $35 to $50, see detail chart -, is quite clearly a three-wave affaire (at least so far), coming immediately after a three-wave correction from $45 to $35. This suggest that the stock has in fact peaked. An immediate target would be $35 again. However, if the entire move from the low of $15 is a B wave (the A-B-C shown in the chart would in its totality constitute wave A, then wave C may be in progress which could (repeat; COULD) imply a return to the $15 lows.

Time will tell but in the meantime stepping aside is the only good option.

HSE, Husky Oil

Hamilton

FOUR different time-frame charts:

HSE Aug 2010 3 HSE Aug 2010 2

HSE Aug 2010 hse aug 2010 4

Depending on the minute details of the last few wiggles, there is still a risk of about one dollar to the downside, otherwise this should be a buy now. Apart from the compelling EW counts, both the MACD and RSI are not confirming the recent lows. Also the stock is down about 56% from the top, in the middle of the 50/62 % range. It yields 4.9%

Initial Jobless claims.

Hamilton

This is a stat provided by the US department of labor; it is a weekly report that counts the initial – that is NEW – claims for the week it reports on. It says absolutely nothing about the total (accumulated) number of people claiming unemployment benefits (that comes a week later as the “continuing jobless claims”, presently at between 4/5 million ). The number is a function of the different eligibility criteria for each of the States.  500,000 roughly, or a good number that is 30,000 less, not counting last weeks revision, is completely meaningless. Here is the chart (updated);initial jobless claims

Notice that the only comparable period to today was in the early eighties when interest rates were about 15%, not 3%. Typically during the late stages of a recession demand for labor increases dramatically, this time around nothing of the sort has happened yet.

IMG, update.

Hamilton

img aug 25

The requirements for a triangle are relatively simple: it should have the a-b-c-d-e (f-g-h) structure, usually each alternate leg is about 61% of either the preceding leg or the one before, wave c is usually the most complex and e can break the trend line but may not trade below the low point of c (however, if it does it may simple mean that the triangle is much bigger than initially thought.  Also, even if it is not a triangle, it still is a consolidation pattern with, potentially, more bullish implications as the triangle is invariable an end-game whereas all other patterns can go on a lot further. In fact , the triangle here is the least bullish compared to ,say, a count that views wave b as 1 up, wave c as 2 down and d again as 1 up. This could take the stock much higher than assuming the triangle. See below;

img aug 26 2

  Assuming there IS a triangle, it could still have a larger wave c to become more complex. This would happen if what is shown as e were to travel to $15 or even a little lower. That would not negate the triangle and, in fact , ABX has one that seems to go on forever. The requirement that all legs within the triangle are a-b-c’s seems to be met but for waves b and d it is certainly less obvious that for a and c. So perhaps we are already impulsively on the way up but starting with very small steps like in the chart below.

 

Then again , if we do have a triangle this may be what is going on;

img aug 26 3

What argues  against this longer triangle is that it does not seem to be in synch with the rest of the market. The best and most “balanced” approach may be to wait for the stock to go through $20 which would suggest the 1-2, 1-2 scenario is operative. There is NO clear bearish possibility right now, given that all down legs are clear 3’s, but that can always change. e already complete is not a very pretty picture!, so unlikely to be correct.