The spread between Hasbro and Mattel that we spoke about a few months ago, has now widened to the point where it reaches the upper trend line. The spurt up after the lengthy consolidating period has all the earmarks of a 4th wave triangle followed by a thrust, even if it does not appear to count that way properly. In any event there is a big gap that often needs to be closed so it looks like a pretty good spread trade.
The usual then, Feb. 14, 2016, slightly mores than one year ago, and now charts;
One year ago we anticipated a rebound to, roughly $40 and then down again to the 4th wave of previous degree and/or where wave C would be vector equal to wave A. Today we hit $6.32 which is essentially the target. However this entire drop from the $55 high could be either an A-B-C X A-B-C or simple an A-B-C. In the latter case the C wave, starting from near $40 would have to subdivide into 5 waves. It does not! See below;
As you can see , we must be either in wave 4 of wave C, or, worse, in wave 4 of 3 of C in which case we still have 4-5 and 4-5 to go. Todays drop is , given the large gap, clearly a third wave. Having said that, it does not necessarily follow that the ultimate low will be substantially below where we are now.
Probable it should be bought soon, but I have not followed recent developments too closely to be able to assess if the worse is over. By the way, HCG is not the only financial institution that used agents to meet growth targets. Confederation Life falls into this category and so does at least one credit union that I am aware of.