Month: February 2016

AC, Air Canada

Hamilton

The usual, then June 6, then Jan 4 and now charts;

ac june 6 2015AC jan 14 2016ac feb 8 2016

We only have a dollar or two to go and we will be at out target. You can enlarge the charts by clicking on them. When we get there this stock will be down by 2/3. This in the face of fuel prices dropping which should have given the company more lift. Where it goes from there remains to be seen. It should be a buy for a trade of few dollars, which on a percentage basis would be quite large. Thereafter my guess is as good as yours. Just remember there are other stocks, move to one with a clear pattern. This “diagonal” is one of the best and reliable. See also ABX for the expanding version.

BWA, Borg Warner Inc.

Hamilton

BWA feb 2016

To add a little insight to our recent blog on Magna, MG, and noting that Tesla is down almost 50%  (more than $14 today alone) we thought we should have a look at BWA. They make, among other things, transmissions without which no car can drive, except ironically perhaps, electric cars. (Electric motors have a more linear torque curve than gasoline engines.) The last $20 drop in BWA is almost a straight line suggesting that it is a third wave of something. That would not bode well for the future  $25/$18/$8 are successive possible targets even though a bounce somewhere around here should be expected given the RSI and MACD. $26.25 may offer some resistance.

ABX update

Hamilton

abx feb 8 2016

It has happened a little faster, we are now well above $16 and have left a small gap on the open. Luck favours the brave, so sticking to our target of $23 may be the most beneficial strategy. The $23 is the normal target after a diagonal, it is very reliable . Perhaps it might even go higher but we would certainly not want to outstay our welcome. Both RSI and MACD are pointing to an imminent turn.

DB, Deutsche Bank

Hamilton

DB feb 8 2016

This chart is from the G&M. It does not include today’s action. The stock is now at $14.79 at the time of writing. Just in case you missed it, the stock is worth about 1/10th of what it was at the 2007 peak and is trading below the 2009 lows. What is worse is that of the two plausible EW counts, both have a way to go as we are either in wave 3 of C in an A-B-C, or we are in a 3d wave of c in a double zig-zag. Both have quite a bit further to go.

DB does not like further easing, here is what they said;

Deutsche Bank has expanded its war against the ECB to include the BOJ as well, and in a note titled "The Risks From Further ECB and BOJ Easing" it wants that with the Zero Lower Bound already breached in nearly a third of global markets, the benefits to risk assets from further easing no longer exist, and in fact it says that while central banks have hoped that such measures would "push investors out the risk spectrum" the "impact has been exactly the opposite."

Now that is refreshing. DB is in trouble. They have a large derivative book. Larger than AIG had and larger than JP Morgan. In fact it is the world’s largest at about 70 trillion gross, that is more than 20X Germany’s GDP. When it comes to gross or net the difference quickly becomes irrelevant after a first default. It is the asynchronous easing by the ECB and the BOJ relative to the Fed. that is pushing the dollar up, oil etc. down and CDS’s (Credit Default Swaps) closer to the edge.

By the way, as of today the DAX is down 27% from the peak set back in April!