Month: July 2012

WTW, Weight Watchers International

Hamilton

wtw jul 2012

Not at all sure if Fergie is still promoting this company. Doesn’t matter as this should sell itself. This is one of the true “growth” stocks, or at least it should be. In the US some 41% of the children are already obese, it is a calamity that is happening everyday and accelerating. Demand for these services should be growing exponentially. Apparently the Chinese, usually lean and mean, are starting to suffer from obesity just as much as the West. So the above bullish outlook may, surprisingly, be correct. In detail:

wtw jul 2012 mwtw jul 2012 s

$45 is a best guess for a low (or temporary low). 1. The a-b-c is complete at that point, 2. A gap on the way up is closed, 3. It will have retraced either 50% of 3 or 62 % of the whole thing and 4. This is a growth stock, literally.

Use a stop loss a few dollars below, just in case it does what INFA did today. Should the trade work, we would not stay with it beyond, say, $65

STJ, St. Jude Medical

Hamilton

stj jul 2012

St. Jude is following the EW script quite conscientiously (see previous blogs). Ultimately we are looking for a low of $24 or less. For the moment two scenarios present themselves as plausible. The green one is initially fairly bullish which is why I would prefer the purple one by a large margin.

WLT, Walter Industries Inc. or the omnipresent B-wave. BTU

Hamilton

wlt jul 2012

A nice 5 wave sequence can be counted into the 2008 high of $110. Some might, of course , argue that the B-wave shown is actually the 5th wave and that the top is at $143. That is impossible as overlap would have occurred! Furthermore the B-wave is nearly perfect, travelling a total of $133 and subdividing in two, almost equal parts off by only a few dollars. A B it is and here we are well into C. In fact C is already equal to A and could be considered complete were it not that it normally stops below the start of A, normally reaches at least the 4th wave of previous degree level and often reaches the lowest boundary line at about $15. It has done none of this.

wlt jul 2012 s

The C wave can be counted either as a 1-2-3-4 triangle-5 and should then soon be complete, or as an a-triangle b-c zig-zag which has quite a bit to go. $30 is almost assured under either scenario. We will keep an eye on it and also (see elsewhere and below) BTU which has a very similar pattern even if some details are different;

BTU jul 2012

See our Oct. blog that was dead on.

CVX, Chevron

Hamilton

cvx jul 2012 arithcvx jul 2012 log

oil 2012

Chevron is among the biggest integrated oil companies. Here is the chart , both arithmetic and semi-log. The small chart is oil itself, just the last 5 years; obviously there is no correlation!

The count may need some adjusted but in the big picture it is probable more or less spot on. A drop to about $60 would be normal. Big trouble would start at about $80 where the stock would drop out of its 40 year channel.  We expect that it will;

cvx jul 2012 s

This is the 5th wave up, it starts a little earlier but I cannot get this chart for free for more than 3 years. One thing that is very definitive is the wedge at the top. It almost guarantees a drop at least to the first target of $85 or so. Time will tell.