Month: December 2011

TRP, Trans Canada Pipelines update

Hamilton

Late October we called for a further rise in the stock to complete a B-wave into the heavens. It is doing exactly that and is now close to it’s destination:

trp b 2011trp s 2011

We are approaching the upper trend line and should hit it in a matter of days. My best guess is around $45 or just a little higher. We are now in the 5th wave of the thrust out of the “megaphone” and it is already almost equal to the 3d wave in that leg.

This is of course a blue chip stock and it’s earnings are regulated by government edict so one might wonder what could possible go wrong. Fundamentally earnings per share have been dropping and the tolls levied on users have been rising at an alarming rate whereas put through volumes have been declining.  There are major cost increases and  the delays in the new pipe through the US are not helping at all. Furthermore one might well wonder why a utility that is regulated (NEB Nat. Energy Board + provinces) should be allowed a return of 9% in an environment where 10-year Gov. bonds earn 2%. It recently moved into the solar business where it has little experience.

BBBY, Bed Bath and Beyond (or not for now?)

Hamilton

bbby

It spent all day at that same Fibo ratio (even if it had been a dollar higher earlier). This is a throw-over. It is also a wedge;

bbby s

Lower highs and higher lows are usually indicative of a wedge, which is invariable a sign that things have gone a little to far.

MG, Magna update

Hamilton

Back in January of this year we warned about double-topping (and , of course the EW patterns) by way of this chart:

mg jan 2011

This was the 21st and must be just about dead on the day it peaked. The text wholeheartedly suggested you get out of the stock. Always when you double top and definitely if there are 7 years in between you should step aside or use a trailing stop. If on top of that you happen to be sitting on the Fibo number of 61.8 (the high was $61.65) the decision should be al that easier. Fast forward to today;

MG dec 2011

We hit a low of $31.91, that is down 48.24 % and we should go still lower!

TRI Thomson Reuters update.

Hamilton

Back in Sept I suggested that TRI might drop to $24 or so to complete this wave. That target may be a little too low;

tri 2011erhaps

The 3d wave is clearly extended. When that happens waves one and five tend towards equality, which is where we are right now. So this could be it. Either way the logical target is first $30 and then perhaps $33 so a few extra dollars would certainly help but you risk missing the proverbial boat. See also previous blogs.