We got most of this C wave spot on. However we were expecting a more sizeable drop in the immediate future. This may, repeat may, be incorrect. The simple reason is that the above C wave is starting to look an awful lot like a contracting diagonal. These are ending patterns and warn of a fairly fast reversal ahead. This could after all still be a 4th wave that could be followed by a new high. Step aside untill the future has become the past and we can more accurately predict it.
The usual then, Jan 22, and now charts.
Chevron was always a little ahead of Shell and has a slightly different pattern, perhaps. But from an EW point of view this one is fairly simple. From the Aug. lows there was an initial 5-wave correction which then has to be a first leg of a 5-3-5 A-B-C. Sofar that is exactly what we are getting. There is a whole cluster of “logical” targets, the B wave level (in purple), the 61.8% retracement level and equality between C and A all around 104/105. You are already up about 26% but now it is worth holding out for more.
This has been a great stock to analyse. It must have read the script. We even got the top right all though we were late to recognize that, see our blog a year earlier, Feb. 22 2014;
Here is a bit of reverse engineering to illustrate possible paths for this stock. We have chosen 3 possible levels for the A leg (of an A-B-C), where it is now, $23 where the 4th wave resides and $30 which represents a 50 % retracement. Furthermore we have assumed that the A and C legs will be about equal. We are preferring the blue one, simple because it is in the middle. In that scenario you would go up to $23 in the A leg, then drop to about $15 and then rise to just under $30 in the C.
After that the assumption is that the stock will fall in the same relative proportion that it did in the past four years, that is down by about 84%. This gives you the targets for the entire correction and also the in between levels where you can buy back in if you sold.
Again, this is just an attempt to create a rough roadmap. None of it may come true but it may just turn out to be more accurate than what your gold bug broker tells you.
For some the wealth management business has been a little underwhelming. Clearly something is not working out the way their own management had hoped. Their have been a number of changes at this company and I am not sure where or what it is right now. However, from an EW perspective we could be in a 4th wave (triangle) which points to about $2.50. The correction could be complete at that point and , for that reason, the stock would be a buy.
Last time there was an opportunity to make 10x your money in 4/5 years was nine years ago. This may be another such opportunity though I doubt that it would be that rewarding. Nevertheless, a double or triple is possible if the stock simple rises to the highest point in the triangle (if that is what it is). Luck favours the brave! And spring is around the corner.
See also CF, Canaccord Financial.