Month: October 2012

ACM.A , Astral Media Inc.

Hamilton

acm.a oct 2012

The stock today is down some 16%, to about $39, on the news last night that the CRTC would not approve the deal that would have had BCE effectively takeover this company. There were a lot of moving parts to this deal so it was not easy to forecast the future. In our opinion you should not even try if the EW patterns are so clear. We have a clear B wave up that basically also creates a double top. You should really not have owned this stock yesterday! and nor should you today. This , by the way, also applies to the disappointed parent to be BCE;

BCE, Inc

A similar A-B-C counter-trend rebound has developed over the past ten years or so. The implication is that the bear market for this stock is not yet complete.

The spike can be ignored as it resulted from Nortel at a time when that subsidiary had not yet been split off as a separate entity.

CUA , CuOro Resources update

Hamilton

cua oct 19 2012

We singled this stock out as one of the few that would NOT rebound. More recently we took the optimistic side and expressed the view that a small bounce might be forthcoming. So far this has not happened. Yesterday the company announced that Geotech in Aurora (and Brazil) , Ontario will do areal geophysical surveys, more or less like flying a large metal detector over the land by helicopter, to more properly define the location and quality of the ore body. The transaction with Pacific Road is amended (delayed) and made subject to the results of this survey. The phase 1 obligation to buy 2 mln. shares for $2 a piece seems a little out of touch with reality. Combined with warrants this would have added about $7.5 mln to the company’s war chest. Pacific Road has already acquired 1.9 mln. shares in the open market and is allowed only 1.1 mln. more. Given the company’s burn rate and its cash position and the probable limited availability of additional financing we would stay away from this stock.

    In pure EW terms the pattern appears to be that of a double a-b-c. The bottom would be somewhere between here and 20 cents, where the stock was 2 years ago. From there a good bounce may, in fact, develop. The RSI and MACD do seem to support that view.

IBM, update

Hamilton

ibm oct 17 2012

Starting from about $194 we thought this stock was done on the upside. Too early perhaps but it is down almost $8 overnight and may have started the climb down. This is a momentum stock and a blue chip supposedly. At $250 bln. capitalization it is definitely one of the “generals”. Watch the trendline at about $200.