The FTSE has still to make a new high, now from exactly a year ago. In the mean time the CAC40, Paris exchange, has traced out an examplary wedge which,if correct, has just a little further to go before it should dive down. We will see. Below is how it fits in the bigger picture, a big C wave withe 3 individual A-B-Cs.
See also previous blogs under CAC40.
The usual then – Feb. 28, 2014 – and now charts;
Our target was at about $15, a little too high but then perfection is elusive. Friday came with a 24% single day gain. This rebound is not over yet. Look for and expect at least $20, and if the triangle is correct , perhaps even $30 which would then constitute a double. By the way, sometimes on large moves as we have here, from $50 to $14, semi-log charts often work better than arithmetic charts.
This brings us to the TSX;
You will notice that at the bottom of the chart the TSX (or TSE) is trading at about 1000 points. Today it is at 14650 and rising everyday by roughly another 50/100 points. So it is about 14.6X as valuable as it was back in 1978. RDS.B was about $6 back then and is trading at $85 now, so that is 14.2X. The volatility of RDS is a little less than the TSE and the dividends are actually higher by a substantial margin. Furthermore the Dutch have managed their affaires much better than we have. If we have a dog like Nortel we hold on to it with our dear life and then loose our shirt. The Dutch with ABN-AMRO manage to get the Brits so excited that they get a bidding war going and buy the dog, right at the top, for almost 100% cash!
You can move the charts of RDS and the TSX next to each other and experience the similarities for all they are worth.
Here are the usual then – December 2012 – and now charts;
Part of the prediction at least was correct. The question which remains is whether or not this is a B-wave (a-b-c X a-b-c) or a 5th wave. In the former case the triangle, which is clearly visible even if one cannot tell it’s exact size, is the b in the second a-b-c. In the latter case it would be a wave 4 in a 5 wave sequence. $87 or so (it has already reached $85) would be about as good as it gets, considering the double top and the triangle measure. We would sell here.
To put the growth of this stock in perspective below is a longer term chart from the G&M.
The count shown, arbitrarily, is that of a 5th wave even though we prefer the B-wave as it “fits” the big picture better.