Nice 5 waves down making the recent rise wave 2. Waves 2 can go almost all the way back up but the 10700 level does form a cluster so it may stop there. Time will tell.
Year: 2014
SOX update, timing is everything.
Then – Aug. – and now charts, as usual;
Timing is everything where stocks are concerned. When it comes to options timing is absolutely everything. It looked like a sure thing back in August as everything suggested a wave b or 2 was about to complete. Not so. First we needed a new high courtesy Mrs. Yellen at Jackson Hole. Our Sept. put with a strike of 585 at $4 with a target of $560 would have done just great if it had not expired! The November option with the same strike is presently trading above $30. It can be terrible frustrating when you are right (which we were not) and you still lose money, that is why you should be prepared to do many options.
RDS.B update
This stock is now down about 20%. As you recall we had a target of $62.50 (apex of triangle, see previous blogs). Using the “gap in the middle” tool from our witchcraft toolbox, we find a target of $61, so now we have a cluster.
The wave count would be a 1-2, 1-2 finishing at $82.73, then another 1-2 of wave 3. If correct the bounce today is a wave 4 of 3. So we have a lot more to go before this is complete.
HAR, Harman International Industries.
Harman Intern. Industries is the parent of the better known brand name Harman Kardon. They make audio equipment and have been around since 1953. Back in the early seventies the bank for which I used to work as a credit officer had large lines of credit to this company.
Looking at this chart we see an EW pattern known as a “flat”. The A and B are most likely complete and the C should then follow. As the name indicates, the whole thing should end up at the same low of the A wave and often well below that. This C wave, unlike the A and B waves which are 3-wave structures, should unfold as a five wave structure. The P/E is at about 26. A sell for sure.