We would be constructive on this stock now (we were bearish). The reason is pretty simple. Going down from $3.30 to 62 cents is a loss of 80+%, enough to please any bear. Next the drop is displaying an absolutely perfect A-B-C with C equal to A, both in time and amplitude (as vector). Moreover the RSI and the MACD have been signalling a turn now for the past 4/5 at about $1.25 would be a minimum expectation at this point.
Right now it is not clear what this was. The beginning of the big bear in which case we would be in a wave 3 of some degree that is not finished and then continue down. The alternative , and given the symmetry etc., quite a plausible one is that we completed an A-B-C correction and now we go back up. The thought alone tires me but that is the message for now. The C wave should be 5 waves which is certainly not clear, and in a “flat”, which is what this is, the a wave is usually an a-b-c itself, which it is not. So I would favour the bear case but only marginally.
We are of the opinion that the TSX is already cooked. The EW count that best fits the action over the past 5 days fully supports this view, at least for now. There was a clear 5 wave drop of about 400 points followed by a 3-wave rebound that has retraced 85%, so far. Today , of course, there is again bullish news, this time ISM numbers from China. Did not know they existed but there you go. Also the Eurozone has the highest unemployment rates since x, again very bullish as this will help a European QE whatever get launched etc. etc. In any case if the TSX stays under 12600 we could possible have a start for the bear.