Month: October 2011

NFLX, update.

Hamilton

NFLX oct 25 2011 

The direction is not at all surprising but the speed at which it is doing it is very impressive. It is down 74% from the highs  of four months ago. By some metrics one could argue that this is enough, for instance the “gap in the middle” concept would put the low at around today’s low of $75. The problem with that is that it is impossible to count the slide down as 5 waves, nor is there a clear a-b-c down. At the very least we should see the stock price closer to the lower trend channel line. Another $20/30 would do the trick. If short buy it back now, just in case.

BNS, Bank of Nova Scotia.

Hamilton

BNS banks

Just a quick reminder that this is the long-term picture for BNS, the high was roughly at $60 in Jan. of this year. Here is where we are today;

bns oct 2011 bns s oct 2011

That $60 was pretty well the top, it reached $61+ in February, a nice Fibo number. From the lows (chart on the left) the stock traced out a well recognizable B-wave that marginally exceeded the previous top in 2008. The two separate legs up are relatively clear and roughly travel the same vertical distance.

From the highs the pattern is not perfectly clear, but if we assume a wave 1 type 2 wedge (don’t ask!) at the top, we could have a 1-2-3-4 wave 5 still to go. The stock moves up and down 7 times without going anywhere. This best “fits” with a wave 4. Also the initial target, the b-wave level in the larger B-wave  (arguable at $42.50) has not yet been reached.

Banks have recently come under greater scrutiny that normal. On BNN there were one or two speakers that opined that Canadian banks were over valued and should be avoided, something unheard of in Canada. Perhaps the notion that banking is not going to be that easy with Basel 3, the Volcker rule , Dodd-Frank, and the 99% occupy Wall/ Bay or whatever street, a flat yield curve and whatever else. The idea that European bondholders, read banks, should shoulder a larger part of the losses may weigh on banking worldwide.

If this is a wave 4 triangle we should start moving down soon. The alternative is that wave 1 and 2 are complete in which case we will go down even faster and further in wave 3.

FSLR, update

Hamilton

FSLR

In June we suggested a target price of $50 on the basis of the above triangle. We updated a few weeks ago with the message that we are not there yet. A few days ago we were there, here is the chart;

fslr oct 25 2011

The low a few days ago was an accurate $50 , but more importantly it is possible to come up with a plausible 5-wave count for this c-wave, with the 5th extended. A rebound to $75 or so would be normal from here. Higher levels are possible, but, as there is no alternation between waves 2 and 4 there is a good possibility that the above count is simple wrong. This could be wave 4 of 3 leaving a lot to go down.

MMM, again

Hamilton

mmm oct 25 2011

Today’s drop of about $5 suggests that we are back on the way down. The retracement was a little short of the ideal level of about $84 or so where the 4th wave of previous degree resides and where we would have had a 50% retracement of the drop. but in this case the initial 5 waves down is fairly clear , as is the 5th wave diagonal (which normally is retraced entirely.