BEI.un , Boardwalk Equities Inc

May 15, 2012 Hamilton

Boardwalk is one of the original real estate investment trusts and will be able to continue operating as such, unlike the other un-s that have had to change their legal structure. We would sell this one now. Three good reasons. One, real estate as a rental is essentially always worth X divided by the inverse of the prevailing interest rates. Roughly speaking property is worth 3 x as much when interest rates are at 4% as compared to 12%. If rates were to go up, the value drops accordingly. Two, we cannot help but notice that this stock is closing in on that wonderful Fibonacci number of $61.8, just a dollar left to go. Third, the trend-line has been exceeded and the next line is not that far above. Then , of course, the pattern suggest a completion of a 5 –wave sequence even if there is a problematic overlap. And, both RSI and MACD are ringing that proverbial bell when it is time to exit.

MDI, Major Drilling update

May 15, 2012May 15, 2012 Hamilton

For various reasons we did not expect this stock to double-top at around $20, hence this particular count that is not 5-waves from the bottom, the last leg to $18 is a B-wave. All that is essentially academic as in both cases a 5 wave down sequence should follow, the top as shown is the”orthodox” top of the retracement. It looks like there was a series of 1-2s at the start and therefore we would expect the same at the bottom. Things can happen quickly as, so far at least, the drop has only lasted 3 months. It is possible that we complete the first 4-5 in the next month or so and take the stock to $9 or below. For the big picture see chart in previous blog repeated below;

Ultimately the target could be the wave 4 low in 2002/3 which on this semi-log chart is a little difficult to guess but is around $1.

OSK, Osisko Exploration Ltee.

May 12, 2012May 12, 2012 Hamilton

Gold miners from Quebec, started production a year ago, trading at a meaningless p/e of 148, cost per ounce about $858 and dropping and the mill just burnt down. Produce about 400,000 ounces once they get going. Here are the charts;

If this is the correct count, and it may well not be, wave 4 is unfolding as an A-B-C in which the C is a wedge. It is almost done, probable. At $6 the stock would have lost 62% of its entire value at the peak and has already lost 62% of wave 3. At about $6 overlap occurs and then the count would be wrong, ergo assuming the count is correct then the stock should not trade below that level. The recent move “smells” like an event driven situation, the event being the fire at the mill. These things are often exaggerated as is implied in this particular pattern. A sharp rebound should then follow. An initial target would be $13. A lower opening on Monday, if there is one, should be bought. Use a stop immediately below $6. No guarantees!!!! This stock trades in Frankfurt as well under the ticker EWX.

WPT, Westport Innovations Inc.

May 10, 2012 Hamilton

Now more than 40 years ago it was fairly normal to power your vehicle with natural gas. For the price of a few hundred marks, guilders or francs you could buy a conversion kit that would allow your diesel/gasoline vehicle to, also, run on compressed natural gas just by flipping a switch on the dashboard (while driving!). For some reason, that I do not understand, this rather basic technology has not found its way across the pond (perhaps for the same reason that diesel powered cars are non-existent here whereas they constitute almost 45% of all cars in Europe). Now with gas so high and natural gas so low one would think that the light is about to go on, perhaps not with the public in general but with commercial fleet operators. The savings are truly eye-popping.

Westport, together with the likes of Cummings and many car and truck makers, is one of the main innovators in this field. Innovation in this context is a little bit of a misnomer as the technology is proven over and over again. Here is the chart:

Back when tech. was king, this stock tried to get to $100 and then dropped to – my guess – $2 in early 2006. I have no idea how to count this, suffice it to say that it could have been a rebound and from here on the stock is ready to dive into the ground. Alternatively we are in a wave 4 (that does not alternate with wave 2) or, and, this may be the most plausible count, we completed a sequence of 5 waves in a new bull market and are presently doing wave 2. All these possibilities are shown in the next two, more detailed charts;

In the most detailed chart the stock dropped today precisely to the lowest point in the top triangle. It had a very volatile day as it briefly almost touched $24. This has been straight down from $50. At todays low it is sitting right on the lower long-term trend line. If the stock is in a new bull it should not trade below $22.5 (overlap). If we are in a bear market a B-wave should develop soon. In that event a rebound of about $8 , to $31 now but a lower level if the stock goes lower first , is pretty common. The long and short of it is that this stock should on the basis of probabilities , be a buy here and certainly if it goes lower.

Note that the RSI and MACD are already heralding a turn. Ask your broker for the fundamentals!

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