We have a 5-wave sequence up. Time to sell. Ah, but you shouldn’t because things are going so well for this company. But that is exactly the point.

We have been wrong on this one, just for the record.

Today’s high at $32.50 seems to correspond with the high back in 1998. The big picture chart uses monthly values so allowances must be made for intraday moves that may be a little higher. Regardless this is a sell.

Linamar went further than we expected ($27) but we have no reason to change the analysis. On the contrary as the large B-wave up from $2 to $31 progresses perhaps towards an equality relation ship and the double-to level of 14 years ago. Definitely a sell for anyone that looks at risk/reward. See also previous blog.

LNR, Linamar is an excellent company in an industry (automobiles) that has a grotesque amount of over capacity plus a degree of nationalism that is only exceeded by the airlines. It just got downgraded by RBC which is not a matter of concern. What is , is the chart. Quite apart from EW, it is worth noting that much of this company’s stock climb occurred in just a few years. It has only been higher than it is today for perhaps a single year in the past 25+ years. Moreover it has been breathtakingly volatile.

The larger chart can be read to mean that a large wave 4 completed at the recent low and that we are in the process of tracing out wave 5. If, and it is a big if, that were correct wave 5 would reach double top levels in a mere $4 from here. Not a lot. Looking at the shorter term chart there appear to be a clean 5 waves up from the lows of $12.30. There is also a distinct 4th wave triangle which, by itself , calls for a drop back to about $19 or so. On balance we would exit counting how lucky we were, twice!