This chart is on a log-scale. The question is, is this a buy? Well the simple answer is that it is definitely not a sell, after all if something comes down from 2000 and gets close to 11 or so , only a madman would sell it short. So , if that is the case is it a buy? Probably if you are patient. As this is 3x leveraged it is not even clear that EW rules should apply but , putting that aside this is like a lottery ticket if you believe the financial system is soon to implode, one way or another. The count , with a little imagination, would be a big a-b-c down from the top and recently a first and second wave to start the impulse wave up. The potential is enormous as the initial target would be around 50, conservatively speaking! Good luck, use only money that you can afford to lose.
Year: 2010
JNJ, starting descent at last.
This one has, as most every stock, has taken its time and a few extra dollars, but now it is clearly going into a downward direction. For a stock that is generally regarded as a “blue-chip” this may be a surprise to some but not if you consider that of the 18/30 original stocks in the DOW only one remains in the index, and it (GE) is trading at a fraction of where it peaked eight years ago.
ATH, Athabasca Oil Sands Corp., PetroChina and IPO,s
When you combine the tar (bitumen actually) sands, with the China factor (PetroChina –the word’s largest corporation – has a 60% interest in certain projects) and all the machinations that often are associated with IPOs – this being the largest in 10 years!- you get a marvelous cocktail of financial magic, hype and predatory pricing. In this particular case the bloom faded the very first day. The question now is simple this – if ,at the time , investors were willing to plunk down 1.35 bln. dollars at $18 a share would this not be a reasonable buy at $11/$9 ?? Just because the value was cut in half does not necessarily make it attractive but from an EW point of view things are looking decidedly more attractive. The dive can be viewed as one large A-B-C correction - the only fly in the ointment being that the recent bounce of the lows does not ( yet ) look very impulsive. Here is the chart;
Raymond James upgraded the stock today, which may or may not be an indication of renewed interest in this company. The RSI and MACD indicators both suggest a bottoming of sorts and perhaps the problems with the Gulf oil spill may help to make this business look (relatively) cleaner and safer. Last , but not least, buying at 1/2 price fits the “buy low and sell high” mantra that, overtime , must be the single most important investment strategy. Regardless of whether or not the stock first goes to say $9, the target in EW terms, stays at about $15.