Month: December 2015

GPRO revisited

Hamilton

gpro dec 15 2015

We thought that a couple of dollars under $20 might suffice. It did not. Monday the stock made a new low at $16.50. From roughly $100 that is a loss of 84%, without using a calculator.

This is an A-B-C down. Often the A and C legs are equal as vectors (that is direction as well as magnitude) which could suggest that the low might even be at about $12. We have a gut feeling that that may be too low. Here are some , more objective, reasons.

1. Despite two or three downgrades the average target with 15 analysts is still at $33.

2. The p/e is at a modest 14 and the company has no debt.

3.Short positions amount to over 31% of the company’s float –the issue price was $24

4.RSI and MACD suggest a turn is around the corner.

5. Marketing by this company is terrible, just a few tweaks could result in dramatic improvements.

6. There are rumours  that the company is an excellent take-over target, perhaps by APPLE. Where there is smoke there is fire. The capitalization is about 2.3 bln., pocket change for AAPL.

7. The C wave subdivides into 9 separate waves, equal to a 5-wave move.

   In short our gut tells us this stock could double overnight. That possibility far outweighs the potential of another $4 down.

VRX update

Hamilton

vrx dec 15 2015

Today the stock gapped up and started trading at $143.36. Last blog we mentioned that we would sell once the stock would trade above $140, which it did today. So we would sell now for a 50% or so gain. We do expect, as mentioned last time, that the stock could easily trade above $160 or so. Tentatively we view this as a 4th wave but more importantly there is a public announcement re. Wallgreen etc. etc. For the courageous, you may want to hold on early in the morning and get out at the open of the market. These spurts up ($22 so far) tend to extend for at least a day.

By the way, at these low prices the stock is still trading at a p/e of 74.

Natgas

Hamilton

 

natgas dec 8 2015

Another look at Natgas. Long-term charts are hard to come by but this one is relatively good and at least 20+ years.

Roughly speaking we have triple bottomed three times (double Dutch??) in the past 5 or 6 years at about (again roughly $2)  Back in 1995 or so that was roughly also the bottom for quite an extended period. That suggests that somewhere around $2 there is a lot of support. However it should be noted that the absolute lows were more in the order of $1.25 (just eyeballing the chart).

In terms of buying low and selling high, the only sure way of making money, it is obvious that with gas down 87% from the peak you are a lot closer to the low than the high. Still I would wait at least for the price to better the $1.90 low of April 2012 before making a move.

The HNU, leveraged up ETF looks pretty good from an EW perspective and RSI;

hnu dec 8 2015

Somewhere here it should bottom.  Here is another chart;

natgas dec 8 2015 f