Month: May 2012

ZNGA, Zynga

Hamilton

znga

I have no idea what these guys do for a living and if it wasn’t for the Facebook IPO I would probable not have paid any attention. It is a buy. The stock dropped like a stone after it had reached $16 down to $6.36, or roughly 61.8%. It did so in a very clear 5 wave move. The above depiction, with a 5th wave diagonal is just one out of two. The other would have wave 3 go on to about $7.40, then 4 and 5. Either way the stock should reach $9 which on $7+ is not bad. Do not stay any longer than that!

MS, Morgan Stanley post script

Hamilton

ms may 21 2012

Further to our recent blog on MS, there is a 3/4 year support line that may hold the stock. Technical analysts of all stripes use rulers to figure out where stocks might, or might not, move. A simple line is often all it needs. The logic is equally simple, you buy above the line in the hope that it goes higher, you sell below the line on a break. In this case the latter option is less attractive given the already depressed value. You do have to give these guys credit for pricing the FB initial public offering, just about right, something we had not seen for ages which , no doubt, caused a surprise and disappointment.

Again it looks like this stock may well be a buy here, if only for a trade of $6/7. See previous blog. All we need is QE3 and the Atlanta Fed guy is already paving the way.

LLU, Lululemon Athletica

Hamilton

llu may 21 2012 sllu may 21 2012 b

A year ago it looked like this stock was cooked at about $60 (post split). It did drop almost 30% but then regained its footing. Now, that is a month or so ago, it again looks like the stock has topped. At that time the p/e would have been close to 60x. At the time I compared the stock to KKD, Krispy Kream Dougnuts, the operative part in that name is “nuts”. If you have ever wondered how herding works, all you need to do is watch your  better half do a little shopping in this store. The first target would be around $43.

HXD, Horizons Betapro 2x bear update and HXU, Less is Better!

Hamilton

If you had a really good broker he/she would not bother you with all the minute little details that can be reported on just about any stock all day long, 95% of which is simple noise. A good broker would take the Less is Better approach and suggest that you invest either in the HXU or the HXD , not both, alternatively. That would cut out all the BS. It would also be unacceptable as it would negate most silly rules and principles adhered to religiously, when it suits, by most practitioners. What it would do is show you if the emperor is wearing any clothes. Most times he /she is not. Here are some updated charts, but also see previous blogs;

HXD l may 18 2012Hxd s may 18 2012

As usual, click to enlarge. This is the HXD, D is for down 2x because this thing is leveraged which is not an added risk provided you keep a comparable amount of money idle (in T-bills). Over time , as the bear market progresses, this one could again trade at $40 or even a lot higher. To see how the HXD trades relative to the HXU, the U is for up, I have created the chart below on Bigcharts , it does not show absolute values so I have inserted them, roughly;

HXD HXU relative may 18 2012

In black is the HXU, which acts like the TSX itself, up or down. Notice that the B-wave retraced a fairly precise 62%.  In light-brown we have the HXD which is the inverse of the HXU or the TSX. Both “track” reasonable well and both have been in a range of about $40 to $8. Soon the two lines might cross once again. The extreme was reached back in March or April of last year. In both the HXD and HXU we should be in the beginnings of a third wave, when the moves are fast and large. Do not count on your broker calling you, we all know the adage about reversing your money and your broker’s experience. And QE3 is just around the corner.

For the record, the HXD is the only stock/etf that I own. I do not normally trade my blogs, it interferes with ones objectivity. By the way , the HXD was recommended back in late Feb. 2011 when it was trading at about $8 and as it is now almost $12 you would be up about 50% for the 14 months. The HNU was recommended big time at $8 just before my departure from DS on Nov 6, 2009. It hit the $8 target purchase price a few months later and then tripled.

Oh, and before I forget , that little sailing boat featured in the brochure (see below), is not yours after you followed all the recommendations, it is your broker’s.

ailing boat