That was good for 9.40% in a single day, a day which saw the markets generally up 2 to 4%. And it did it on pretty high volume. First stop should be around $70 (see previous blogs).
Month: June 2012
BDX, Becton Dickenson & Co.
This company makes medical instruments which it sells all over the world. This is a model 5+ year “flat” correction that has the 3-3-5 signature. It is moderately bearish and consequently the first leg down is a 3 wave structure instead of the 5 wave structure that you would find in the zig-zag. But about 50% down is no fun, particularly not if you do it twice in a row. Target is about $55 and then some and is highly reliable.
F, Ford
Ford is different from the others in that it is already in a new bull market without having gone into bankruptcy, even if it did trade below $1. We liked the stock then (see 21 previous blogs) but are not sure lately.
If this is a correction of the move from $1 to $19 it should take the form of a zig-zag, or a double zig-zag. One single zig-zag was complete at the $9 low, however the next move is an a-b-c again suggesting the trend is still down. If so the first leg of that second zig-zag may be complete. If so a rebound to , say, $12 is possible and then another leg (c) . The second zig-zag could end up being about 62% of the first. This is not similar to, but does rhyme with NAV and GM. The RSI and MACD suggest this might be a realistic possibility. In one of the previous blogs I calculated that $7.84 represented a 61.8% retracement of the entire move.By sheer coincidence that also happens to be where the lower neckline of a possible H&S formation runs, for whatever that is worth. When in doubt,only use other-peoples-money, not your own.
The H&S target would be around $4.
GM, General Motors
Click on the left blog to enlarge. In reality it did stop at about $19 and did bounce about $10 ($9 to be exact), and it did prove to be a 4th wave. The whole thing does not channel particularly well but that may be due to the authorities randomly throwing in a QE2 or the twist or whatever. Presently, as with NAV, it looks like we are starting the 4th wave of 5 of C. A plausible target would be about $16 but one has to be careful not to hop on the bandwagon too early as so called extensions can ruin the fun real quickly.