The picture says it all. Wave 5 is equal, give or take, to 1 and 3 combined. Harvest time?
Month: December 2012
TXN , Texas Instruments
Just in case you bought the wrong one, here is the EW take on it;
Like all tech. stocks this one has been struggling for years to regain at least a portion of its 2000 losses. Looking for symmetry tells us that the stock could still work its way up to about $40 over the next two or so months. At that level it would have regained about 40% of those losses and have completed a nicely balanced A-B-C for the counter-trend rebound. After that it is probable on to about $10. Here is a more detailed look at the triangle in the C leg.
If it is a triangle (there are grounds for some concern, i.e. possible overlap) then wave e still has to form itself. It need not go all the way to the line but should in any event reach about $29. Should you buy it there do put in a stop at $26. Triangles can be deceptive, often they are not what you think and when they are not the most likely alternative is a series of 1-2s and the next thing is a waterfall down!. The risk /reward is still about 1 to 4.
TXI, Texas Industries Inc.
They are in building materials and fixtures, not to be confused with Texas Instruments (TXN). The P/E is a modest 116 and 13.4% of stock is held in short positions. The area within the blue rectangle was in one of our major financial newspapers (Dec.22). The call is for the stock to rise to $54 or $59 on the basis of point and figure charts, but considering the long trading range between the blue horizontal lines the stock could go a lot higher. As it makes little sense to recommend a stock that has already traded at $52 if the target is only $54, presumable there is confidence that the stock does indeed go a lot higher. This outlook is negated only with a decline below $40/41.
On an EW basis the stock could go to the upper trend line of the C in the larger B, at $55 max, but thereafter it should be downhill. The RSI and MACD also support this view. Time will tell.
PSN update
Then and now;
The 4th wave did not get quite as high as thought. It did not enter the gap area at all. Anyway now the 5th seems to be complete after hitting a low of $2.74
Now that the stock has dropped from $16 to <$3, our analysts are a little more optimistic than they were the first day after the drop, but not by much, on average they are now a hold instead of underperform. The company is going to “vigorously” defend itself against a lawsuit whatever that means. We would leave it alone but definitely would not sell it here. A good bounce is overdue.
