Then , June 2013 and July 2015, and now charts as usual;

and now, that is today;

Different chart suppliers use different ways of coping with stock splits and other wonderful things. As you can see the Bigcharts have a peak at around $53 or so, whereas the G&M chart peaks closer to $96. There is no right or wrong way of doing this but, when Cenovus , CVE, was split out of ECA at the end of 2009 obviously the ECA stock drops by the value of CVE plus or minus the beneficial immediate impact of the split, here that is roughly from $66 to $29. If this is not worked backwards and forwards into the chart it becomes quite meaningless. Some may not notice!

In any event (see the text in the blogs) the target was originally as low as $5. Then there was the possibility that the drop might stop at a little above $6. Today we will stop EWaving and switch to the Head and Shoulder method, as I understand it. That tells me we are at the exact low.

If the wedge is correct than we could get a violent reversal and, by the way, the 5th leg in this wedge does not have to, and most often does not, go all the way to the trend line.

Then, July 24th, and now charts;

Using the Bigchart we estimated a bottom at about $7 using three different metrics. The actual low was at $7.39. From there it nearly doubled and, so far at least, the bounce looks a lot like a simple a-b-c, that is a correction. A new low might still be forthcoming.

Markets have an uncanny tendency towards symmetry and regardless whether this is a 5th wave in a diagonal or a 5th wave in a normal sequence, for symmetry to apply the stock should drop $1,13 below this last low which would bring it to $6.26  Don’t bet your last dollar on it but do expect another new low.

A few years ago we had a tentative target of $9 for this stock. We are surprised that it is getting there, after all this was one of the darlings in the energy space. The count is virtually unchanged from what we had back then and we would expect a bottom somewhere between $10 and $5. The line connecting the lows, which can be quite a bit off over this length of time and with this level of resolution, runs at around $7 which , in our opinion, is hopefully going to stop the decline. In any event you would be buying low compared to the previous 7 or so years.

Encana has traced out very nice EW patterns (see previous blogs). It also climbed Mnt.Everest (the stock split since then), and is now coming down the mountain. This is usually more painful than going up, if only for the simple reason that most investors simple will not even contemplate the short side. So where will it stop? Anywhere between here and zero is the correct, but rather useless answer. First and foremost it should make a new low, that is trade below roughly $17. Next , very often, waves 5 and 1 are equal which would suggest about $13. This is also very close to the top of wave 1 on the way up, a fairly common relationship where there is an extended wave. Then there is the trend line at about $9.

There is no way of telling which level might prove to be the low other than monitoring the progress of this 5 wave of C and keeping our eyes glued to the RSI and MACD. For the moment the guess is $13.(see blog of 20 June 2011, below).