ELUXY

ELUXY, Electrolux update and WHR, Whirlpool

Hamilton

On July 6, 2011 we put out this picture of Electrolux in order to demonstrate the seemingly senseless ups and downs that stocks are submitted to in the markets. Here is that chart;ELUXY

Despite all these moves it was still possible to put a reasonable plausible EW count on this stock. We know that nobody on this side of the pond owns the stock so we have not followed up on this prognosis. However , today it is the news again, announcing a 10% layoff of it’s workforce and generally guiding down on the “white goods”sector. Here is where we are today;

eluxy oct 28 2011

Unfortunately Bigcharts does not allow me to get the exact same chart this time, so this one will have to do. The projection was for wave 3 to take the stock from $50 to $23 or so. In reality it dropped to $28 and then rebounded to $39. Now it is reasonable to expect a triangle or flat to form to provide alternation with wave 2. Today’s news may provide the “fundamental” backdrop for this kind of action.

WHR

Whirlpool is in a similar position, having lost about 50%. But here there is an outside possibility that a simple A-B-C (in blue) was completed. We doubt it but it is possible. More likely wave 3 is still in progress.

ELUXY, Electrolux AB update.

Hamilton

eluxy july 19

See previous blog of July 7th.  The stock did not wait long and decided today to continue it’s trek down by about $7 or 16%. If this gap is the midpoint of a third wave, $31 might be next  ( this would also make wave 3 approximately 1.618x wave 1 ) but the ultimate target is more in the order of $15/$10, again see previous blog.

ELUXY, Electrolux – How the Fed has changed investing to gambling!

Hamilton

ELUXY

This chart is of Electrolux, not a very familiar name on this side of the pond but very well known in Europe. In terms of household items these guys are big, on a par with Philips, Siemens , Kitchenaid and so on, very respectable and given the nature of it’s business, that is retail, more susceptible to society’s mood swings than most. Add to that the Fed. and their counterparts in other jurisdictions and you have an ideal brew that muddies the water and , at the same time, creates marvelous opportunities for some of the trading houses that are better informed than the rest of us (and use EW extensively taking care not to mention it).

Particularly for the period from about ‘97 onward during which the “maestro” was invincible, to now and perhaps a little longer, this stock started to swing like a yo-yo with an ever increasing amplitude. I count at least 10 moves larger than 50% over this 14 year period. Many moves are much larger! If you are inclined towards the buy-and-hold approach, you would have earned only the dividend for the past 12 years. If you had been able to call the major turning points you would have earned well over 3844%  (50% compounded 9x)plus the dividends. You must buy and sell.

For those that are agnostic about the applicability of EW while putting their faith in the Fed,, I would point out that every single little move in this chart follows EW rules and guidelines to a tee. Next stop is a new low!

By the way, if head & shoulders are your game the end result is equally dismal (I think, as I am not too familiar with that concept).