CL

CL , Colgate Palmolive update

Hamilton

cl aug 2012 s

Timing is everything. This one we got wrong. This is what we have been expecting for quite a while now (see previous blogs). The whole thing would have ended with a wedge and a price of about $92. Clearly that is not how things turned out. It would have been unrealistic at the time to assume that this whole thing from the lows could actually take 4 to 5 years and another $18. However, in our defense, we did point this out as an alternative(see blog of Aug. 31, 2011) as in the (updated ) chart below.

cl aug b 2012

Rather than a single wedge wave 5, this count anticipated a series of 4-5’s. The target (depending on the time) somewhere in the order of $100+. We are beyond that by about $9 which could simple be a usual “throw-over”. Comparing CL with the S&P500 clearly demonstrates the unusual “blue chip” behaviour of this stock;

cl and S&P

This comparison covers the past 5 years, 2007 to the present. The S&P has done virtually nothing on balance over that period, down marginally by 4.61%. Colgate, on the other hand is up by 56.78% for an outperformance of 61.39% (nice Fibo #). Looking at it in comparison to one of its main competitor Unilever NV (UN),produces similar though smaller results;

cl and un

Unilever shows an increase of 14.53%, but if you go back a little further in 2007 the stock is actually down by about 6%. Cl, as before is up 56.78% . Cl has a p/e near 21 and UN closer to 18. The stock is again a sell, and this time there is no clear alternative in sight.

Procter & Gamble

Hamilton

PG

Procter & Gamble is cutting its outlook, and its stock buy-back plan. These guys are the world’s marketers par excellence. What is not clear is whether or not that is a compliment. In 1973 I applied for a job at their European headquarters which were then in Geneva. They spared me the agony if becoming a salesman by rejecting my application, making it clear that salesmanship was not, by a long shot, my trump card. Instead I should have borrowed a truckload of money and bought the stock which would have earned me more than actually working a lifetime.

Today the stock should be sold! There is little doubt that there is a 5-wave sequence up from the lows (this is even clearer on a semi-log chart, see below). The first target would be the channel  line at about $53, next is $45 and then $40. The best target overall is at $29 (4th of p.d. and 62%). All of this even in an ongoing bull market in the event that we are presently in a 4th wave of a higher degree than shown. Colgate-Palmolive may at long last go in the same direction having topped $100.

PG semi-logPG CL

For those so inclined, there appears to be a pairs trade here. Sell Colgate and buy P&G, 2 to 3; the spread has never been larger. However if the starting point of the chart is brought forward the spread is reduced significantly.

cl pg

CL, Colgate Palmolive, update

Hamilton

CL may 2 2012

Colgate went to $100.80 in a “throw-over”, that is exceeding the upper trend line. We never expected this stock to trade much above $92 and certainly did not expect it to take so long. However we do not see any reason to change the outlook. This structure is, with very little doubt , a “diagonal” , the only structure that allows for overlap. Another characteristic is that the third wave is never the shortest! In rough numbers wave 1 was $40, wave 3 $30 and so far wave 5 is about $26 at the $101 level, ergo it can only go an additional $4 if this analysis is correct.

cl may 2 l 2012

The only plausible but very unlikely alternative would be a count with a series of 1-2s at the beginning and 4-5s now. Even then the stock would be topping but the above rigid math would not necessarily hold. Jan 2013 options are now as follows;

cl options

Suppose you bought the 100 strike Jan 2013 put. It would cost $5.60. Should the stock drop down just to the lower trend-line (it should go much further) your option would be worth about $35.85 (where the $130 strike now is). Lower strikes give higher returns but with a lower chance. Same thing for shorter terms.

CL, Colgate update

Hamilton

cl sept 21

It has always been our contention that Colgate  is the real canary in the coal mine. We got it wrong the other day thinking it was game over, instead the stock climbed almost two bucks. But then today it reversed down almost four dollars. This happens not surprisingly at a point in time where the C wave is precisely equal to the A wave of the larger counter trend B – wave rally. Measure it yourself if you doubt it.

Today’s almost $4 drop, unheard of for this blue-chip stock, tells us a lot. It tells us that not only is the Fed. incompetent but, and this is the real revelation at this time, it is impotent, plain and simple. Perhaps the market and the moronic advisors that serve it, is catching on.

Concerning Cl, it should drop to $70 for starters, a lot lower after that .