Year: 2012

RIM update

Hamilton

Then (Dec. 12th) and now charts;

rim dec 12 v2012rim dec 20 2012

It is always heartening to see that the EW approach does sometimes lead to superior results.  It certainly is better than listening to the noise from BNN.

The stock did go to about $15 (overnight) on wave 3 as anticipated  (Nov. 22 blog) but then things cooled off pretty fast and now we are down 20% or so. This is probable (repeat; probable) part of wave 4. Often waves 4 become triangles and need some time so there is little need to stick your neck out now. But the largest move is usually the very first leg of the triangle so you might miss out on some of the action. $10.05 is where wave 4 could go.

We would be inclined to wait this out. There is a possibility that we are actually already in wave 2 down in which case we could go even lower. At about $9.50 it would be a buy in all cases.

SLF, Sunlife update.

Hamilton

Then (twenty days ago) and now charts;

slf dec 1 2012 bslf dec 20 2012

We anticipated that the stock would climb to between $27 and $28. It hit $28 and reversed. Since there is overlap either this entire scenario is wrong or it has to be an expanding diagonal. We will go for the latter option which would then imply that this stock is now in its 5th wave down on the way to a new low. The message, though slightly different, is the same for MFC.

NKE update

Hamilton

nke dec 20 2012

We were wrong in expecting this stock to drop straight to about $70. It did not. The error stems in part from the fact that the 4th wave in wave 1 down is barely visible, reason to believe that we were in wave 4 of one and not wave 2. So half a year has gone by and here we are and now it looks like we could start dropping soon again. Wave c of 2 is presently in a minor triangle so a quick little burst up of a few dollars is still possible but in the big scheme of things the next move should be down, down a lot.

HLF, Herbalife update

Hamilton

hlf jul 31 2012HLF dec 21 2012

The usual the (July 31) and now charts. Not perfect but close enough. This one is under attack by the same fellow at Pershing Square that “saved” CP. What role is played by this activist hedge fund is not entirely clear as this particular stock (a member of the $7 to $75 club, see previous blog) would probable have done all this without any help. The patterns are usually fairly clear, a gradual but steep rise all on momentum, then a little battle between bulls and bears near the ultimate peak, then the peak and then collapse (Nortel did exactly this).

Last time I took their slogan of their website and put it in the blog. It is all about changing lives by pressing the right buttons, from charity to community participation, from weight loss to healthy nutrition and now also finding a job etc. etc. It is a marketers dream. They come and go all the time. The alleged sin in this case, according to Ackman, is that a very large portion of the 3.5 bln. in annual sales ends up unsold in the basements of their direct sales force. i.e. the success is not so much due to selling as it is (for the moment at least) from recruiting. If true, and the company denies everything, this is the classic formula of a Ponzi scheme. Ackman is not the first to take aim at this company, not too long ago , back in May,  David Einhorn expressed similar doubts about the company. Just to give some reassurance, this company has been around for more than 30 years and is headquartered  in that bastion of probity, the Cayman Islands.