Month: August 2010

EMP.A , Empire Company a.k.a Sobeys

Hamilton

Here are the long and short term charts for this stock.

EMP aug 2010 EMP aug 2010 2

First of all, there is absolutely nothing wrong with this stock except , perhaps , the somewhat arrogant name. Essentially it is a food retailer with a home base in Nova Scotia that has been expanding towards Ontario etc. Perhaps because or as a result of its home base it has pretty good fish. Financially its P/E is a respectable 13X or so. It is a sell.

From the long term chart it is clear at a glance that this stock has done extraordinarily well, and has done so – arguable – in a clean 5 wave move. Two good reasons to sell. Furthermore, as is clear from the short-term chart , the rise from the initial low after that top, is a very clear symmetrical a-b-c which is the signature of a B-wave within an “irregular flat”. In this pattern the B-wave (itself an a-b-c) rises above the original top (it did at $57.45) and then the stock drops to below the initial low (< $35 ) and sometimes ,with a fairly large margin, more (to $25?). At today’s price that would be a 40%+ return, probable within the year. If that is not convincing, it is also a “double (or triple) top, another powerful argument.

For comparison purposes I have added a chart of Merck MRK, from ‘99 to ‘03. The stock had the same pattern with the irregular B-wave after a top. At the time this was a favorite bluechip pharma stock that was on everybody’s buy list. In the end it dropped to about $20.

MRK aug2010

So how certain is this? Provided the stock does not shoot up immediately I would think that chances are very good that this is going to happen. As always, ask your broker and if he/she disagrees the odds are even better.

SC , Shoppers Drug.

Hamilton

We recommended this one about two months ago when the stock was marginally below $33. It  immediately shot up to $37, but, the target is a few dollars higher, furthermore the wave 2 is clearly  corrective so a new high should be forthcoming. Stick with it.

sc aug 2010

POT. pre-market

Hamilton

The premarket indication is for US$ 152.39, with the exchange at 95.68 the Canadian equivalent is C$159.27, not far from the suggested $160.

The latest argument for a higher price according to the company itself, is that each year 75 million new people need to be fed and presumable they are the enablers.

IMG , I AM GOLD

Hamilton

On Jan 27, a ventured a guess where this stock might go. As you know, I believe that both the bulls and the bears have good arguments, but sofar if the bull argument is correct, why is gold not already at $3000+ ?, after all the financial world almost came to an end etc.etc. So, when I venture a prediction I do so very hesitatingly. Here is the Jan 27 chart;

IMG Jan 27 2010 2

and where we are now;

img aug 2010

The stock did not actually fall to $12, but did reach $13+. From that point it goes nowhere, which is potentially bullish ( remember, do not sell a dull market ). This congestion/consolidation pattern may well be a triangle. If so the stock should drop in wave e, but not below $16 (unless the triangle gets even bigger) . Then there should be an explosive thrust worth  about $10. So the game plan should be to buy at ,say , $17. Stop-loss at $16 and wait with odds 10 to 1 in your favour. As the time frame is fairly clear- the top should be reached in 6 months time at the most, options can be used here as well. Similar but slightly different consolidation patterns, some much longer, can be seen in ABX , G and the XAU. Kinross K is a bit of an exception having gone down most of the time. Good luck.

By the way, by clicking on the charts they can be enlarged and then aligned by dragging them.