Month: June 2015

WFC, Wells Fargo update

Hamilton

wfc jun 8 2015

Back on the 5th of Dec. last year we suggested to sell this stock if not immediately then at the $58 price target that I thought was the max. leeway this stock had given the upper trend-line. The high , so far was $57.22 and neither the RSI or MACD appear to confirm this. The wedge with it’s overlaps is clear as a bell. First target, as always, is at the base of the wedge at just under $46, or down roughly 20%. It took  about six months to add the last $3 but it may only take 2 months to subtract the next $11. Time to get out.

JMAT, Johnson Matthey (trades in London, in pence)

Hamilton

jmat june 8 2015 linjmat june 8 2015 log

You have to read the name twice to get it right. These guys have been around for over two centuries. I know them from the time I did the funding for Bank of America in Amsterdam, around 1975. At the time they were , among many other things, money brokers. They are best known for there precious metals refining and assaying business. In 1852 the company was appointed as the Official Refiner and Assayer to the Bank of England. That is the equivalent of being invited to tea by the Queen, only more durable. It is a very prestigious company, comparable to the likes of Barings that started with that other precious commodity, wool. Both met, or almost met, their end as a result of reckless and speculative financing activities. Both were sold for one pound, JMAT in 1984 by the Bank of England that could not bear the thought that one of its few chosen banks might go under and display all the dirty laundry. Since then it has all been uphill.

We show both the linear  and the log-scale charts. Some of the performance may be due to the company’s involvement with the auto/truck industry. It makes all kinds of catalytic convertors  which is a logical extension of the platinum/palladium refining biz. The count is not perfectly clear but the channel is. The stock has now been creeping along the upper trend line for some time. From the recent lows it has more than tripled and consequently the risks are exceptionally high. Time to exit.

AVON, AVP

Hamilton

AVP june 5 2015 bAVP june 6 2015 s

Avon is a multi-level-direct-sales organisation that sells perfumes and other such toiletries. It is a company for women according to the slogan and it has been around for more than 125 years. You may recall that in My Fair Lady the swindler was Hungarian. In the latest hoax involving Avon the swindler was from Sofia, Bulgaria and he too used the power of speech rather to swindle than teach by posting phony takeover bids. The important thing about that is that the stock was receptive to this sort of hype. In the future it should not take much to move it up a few dollars.

From an EW perspective the stock has completed (almost) an A-B-C correction down for which the proper labelling is  W-X-Y   don’t ask. The symmetry of this structure is absolutely amazing. Any moment now, give or take a few days and a level +/_ $6 and this should be ready to turn. RSI and MACD are both already on board. If, alternatively, one would argue that the (failed) top actually occurred in 2008 rather than 2004, the same equality relationships still hold with respect to amplitude (but not time). So the count is very robust.

RDS.B finetuning.

Hamilton

rds.b june 05 2015

As we get closer it becomes easier to calibrate this stock. $56 seems to be the best spot to buy. The yield is 6.40% now so by the time it gets there that should be, at least, 6.6% At that rate your money doubles in less than 11 years. By  that time  Christine Lagarde  may well be head of the Fed., with rates still at zero. If a Canadian man can become the Governor of the Bank of England, why not a French woman the Chair of the Fed.? Unlike the Bank of England the Fed. is still a private company with just a few international investors, just like the Beer Store here in Canada. At least as far as Canada is concerned, that begs the question if free beer would stimulate the economy better than free money. Unfortunately, Keynes himself did not offer any guidance on this matter.