Month: February 2011

F, Ford.

Hamilton

F 2011 feb 16

Red, Green or Yellow? This was one of our best calls. The initial target was $9 with a very high level of certainty, (back to the top of the wedge). After that $15/17 for wave 4 of previous degree. At this point we have no idea whatsoever, the stock could continue to the usual 50/60% retracement levels or a lot further if we are in a real bull market. Paradoxically ,you would not touch this stock if you are long-term bullish. A schematic representation of a real bull would look something like the green chart. Before we go up a solid pull-back in wave 2 should normally be anticipated; these typically retrace the 60+% and therefore it would not be surprising to see the stock first trade at about $7.  In a bear market the stock could easily continue to about $23. This is yellow, stay out the risk/reward ratio does not warrant a position.

RDSa, Royal Dutch and the Can.$$ (CDW)

Hamilton

So what do Royal Dutch and the Canadian dollar have in common? Oil! Royal Dutch goes back a long way (Bataafsche  Petroleum Maatschappij N.V.) and is presently one of two of the largest integrated oil companies. The Canadian dollar is now a petro-dollar as they say, so , presumable what is good for one is good for the other and v.v..

 cdw 20112 rds feb2011

On the left is the Can.$ with its 5th wave up from around 78. This wave is clearly a wedge, an ending pattern that invariable will retrace to its origin or below 93. On the right is Royal Dutch with an equally clear B-wave, close to the usual 61% retracement, c=b etc. etc.  Time to exit both. First lets see if the stuff itself agrees; It does.

Brent 2011

T, Telus. (update).

Hamilton

t 2011 4

See also previous blogs. This company reported earnings today and beat the street by 1 cent. They all either beat, or miss by 1,2, or 3 cents but it is completely useless and meaningless noise. The stock, in any case , barely moved. It first fell 62% and then retraced a similar amount and it now sits at the b-wave level of the 2007/10 drop. The light on this one is neither red or green , instead it is yellow.

Nevertheless the stock is a sell. This is the original Alberta government telecom company gone private. In Canada governments are fooling around with band-width, content and other such issues. The CRTC is soon going to come with some new rules etc.etc. Competition should increase and as our 3 main phone companies charge exorbitant fees, relative to other markets, odds are that their profitability will decrease. At the present level the stock is up 70% from the blows and clearly well into the “high” range by a very healthy margin.