Month: February 2012

LNG, Cheniere Energy

Hamilton

The Blackstone guys are buying 111 mln. subordinated shares at $18, which adds up to about 2 bln. equal to the company’s capitalization. This is seed money for an export terminal costing about $10 bln. to, you guessed it, export L (liquid) N(natural) G (gas), from the US that is presently not enjoying an abundance of the stuff to other parts of the world. Also there were some rumblings about using the fuel in existing internal combustion engines, as in diesel locomotives and normal cars, something that is pretty common in Europe. Here is the chart;

lng feb 2012

By the way, this stock , once upon a time, was worth more than $45. Two counts are possible. In blue, 5 waves up to a top of $13, then an A down and a (very nice) B up, C to fallow. In red, we are presently in the 5th wave up that is clearly a three wave affaire and consequently would have to be part of an “expanding diagonal triangle”. This would also be required to explain the overlap between 2 and 4, normally a no no. It does not matter which count is correct as in both cases the stock should drop back to about $3. We would sell at $18 or even lower (as in right now).

Dell update

Hamilton

dell feb 2012Dell s feb 2012

Back in August of 2009 (see previous blog) we recommended the purchase of Dell with a target well into the twenties. Today we would suggest selling the stock now and taking a 40%+ gain over roughly 18 months. The reason, in simple terms, is that the stock had a “thrust” up from a pattern that looks suspiciously like a triangle, moreover the thrust is pretty well equal to the mouth of the triangle and the top is reached perpendicularly above the apex. What more can you ask for. Thrusts, which are 5th or c waves are, almost without exception retraced right down to the lowest point of the triangle, about $13.50, so why stick around?

GDOW

Hamilton

gdow big cgdow s circle

This is the Global DOW. It is the same chart in both pictures, but with a different emphasis. In the larger picture we have the A wave down followed by the B up. We are now in the C which should subdivide into 5, separate waves, wave 1 and 2 are (almost?) complete. The structures within the circles are essentially identical. Soon wave 3 down should start. The retracement on the rebound was about 60-70%, if we get the same proportion now this one should be as ripe as a rotting apple. Below is what the whole thing might look like once complete.

gdow bb

Fortunately there are alternatives. One would be that the B-wave is not yet complete. Another leg up to perhaps 2600 could kill a whole year but in the end the big dive would still happen. There are a number of other variations but overall the outlook is pretty dismal.

FSLR, First Solar update

Hamilton

fslr oct 25 2011fslr feb 2012

On the left the Oct 25, 2011  blog, and on the right the Feb. 25, 2012 picture. The e-wave turned out to be a little on the short side, which happens when the stock is in a hurry to get going, and then the C-wave , which was expected to go to $50 or so to keep proportionality with the A-wave, actually went beyond that and got all the way to $30. Needless to say, if you were short you would have bought back for 60+% gain, if you are still short buy it back now. The stock could easily go lower but the most recent rebound, from $30 to $50 is a clear (maybe, maybe not) 5-wave structure, followed by an a-b-c retracement to $35 (about 3/4!). The c leg could start any moment and take the stock up about $20 from here. But the count is not perfectly clear so one should leave it alone or work with a tight stop at $29 or even higher.

fslr s feb 25 2012

Either one of these trajectories is possible, which essentially means that what you lack in certainty must be compensated for by discipline, hence the stop-loss.