Month: January 2011

CNR

Hamilton

CNR cnr 2

From under $9 to about $70 in a little over 10 years is somewhere in the order of 24% per annum (rule of 72, 3x from 9 to 18, 18 to 36 and 36 to 70). Quite remarkable for such a pedestrian thing as a railway and that in an economy that is supposedly depressed. We are hitting the upper parallel trend-line after a 5-wave move up, that is high and time to sell.

The shorter–term chart does not count well and what is shown may well be wrong. Other, more complicated counts may fit but they go beyond my pay level. Suffice it to say that there is a very nice wedge running into the top. More detail below;

cnr 3

These wedges only occur in 5th waves which may mean that the top is already behind us. The Dow Jones Transportation index provides little confirmation;

DJT 2011

This one may go higher yet, but it is only a couple of hundred points from the old top, quite amazing with fuel costs where they are but that would make the trains relatively more attractive, which explains why CNR has outperformed, but enough is enough.

EEM and XEM, emerging markets

Hamilton

When investors become more risk tolerant they invariable stray further away from home and rapidly forget the history of these markets. Here are the EEM (US) and XEM (Can,)

 eem 2011 xem 2011

Notice that we are at spitting distance to the double top line, after having completed either 5 or 3-waves up. On the Canadian version, the chart is shorter as this one has not been around that long, the rise from the low is a TEXT-BOOK 3-wave move up, perfectly symmetrical in that the C=A and the c=a in the B-leg itself. Time to move aside IMO.

HCG, Home Capital Group

Hamilton

I was wrong on this one, it just kept going. Here it is ;

hcg 2011

At $47 it hit the first trend-line and did fall back quite a bit but then found its composure again and has continued to go up, this time to the next trend-line at about $56. This too could still be a B-wave, or a 5th as I had assumed earlier. It really does not matter as this is where high is high enough in my opinion. Another $5 is still a possibility but not worth sticking around for, see chart below;

HCG 2011 2