TCK.B

TCK.A, Teck/Cominco.

Hamilton

2 years ago we opined that the stock had not yet completed 5 waves down and therefore could go lower. (see old blog). Even though that assessment proved to be correct,it did not help very much as we forgot to look at it again for too long a period of time. Today at almost $65, or $12.5 above the levels attained at the triple top in 2007/2008 we would sell the stock.

Fundamentally, if you agree that buying low and selling high is the way to go about investing , the question how high is high must have presented itself. Could this be high? Like a phoenix this thing rose out of the ashes and here it is well above the old highs, mostly due to the China’s insatiable appetite for iron ore, copper and what not. So the stock could be vulnerable should China’s Wirtschaftswunder come to an end, that is level off.

Apart from that the charts suggest 2 alternative possibilities, here they are;

tck 2011 1 tck 2011 2

Apart from clearly showing that this stock, should it regress back to the mean, is overvalued by at least $20. More importantly, in my view, there are now two possibilities in EW terms. The first , on the left, is that the orthodox top in this formation occurred sometime in 2007/8. As there are actually 3 tops at about the same level (not shown well in these charts, anyone could have been the top. It matters little except that the drop into the lows is consequently clearly not a 5-wave move; perhaps an a-b-c. On the right we assume that the whole upward cycle was not yet complete and needed a 5th wave. That both possibilities can be reconciled with the structure of the up move is pretty clear from the detailed chart below;

tck 2011 3

This leg can clearly be counted as either a 5th wave (with 5 subdivisions) or a large B wave (with 3 subdivisions) that rises above the orthodox top. At this moment one cannot say with absolute certainty that this stock cannot go up another $10 or so , but what can be said with a good deal of certainty is that the next big move will be down to $3, or $32 or anywhere in between, depending on which chart you believe. Time to say thank you and move on.

See also Copper, above.

PCU Southern Copper Corporation , April 14

Hamilton

PCU April14

As a stock Southern Copper has one of the emotionally  highest intensity displays of what otherwise should be a very sobering Phd. in economics. This one is particularly interesting to E-wavers simple because of the present CRITICAL position the stock has. Clearly we have waves 1 through 4 done, except that 4 is probably NOT complete. Though only a guideline (all this is empirical ,of course) wave 4 should not overlap wave 1 which would occur if the stock were to trade above $22.50 (about $1.25 away from where we are!).Moreover it is highly unusual that waves 2 ( a zig-zag) should be followed in wave by wave 4 (also a zig-zag, so far!). This is unusual as more often than not the two alternate. ergo I believe wave 4 may just develop into a triangle and what we see so far is only wave a of the triangle. Wave b should drop at least to $12.50 so there are $7 to the downside and $1 to the upside. 7 to 1 is a tradable proposition provided your broker knows how to use stop-loss orders. Options are an alternative. Think of all copper stocks, like TCK.B etc.etc.

By the way, copper , the stuff with the Phd. more or less confirms this view, see below.

Copper

TCK.B Teck Cominco Feb2.

Hamilton

tck.b feb 2

A little while ago I was itching to buy Teck, not only do I love tech stocks but  it had dropped so much that it was only $3 plus away from oblivion and I asked myself at what point does value become deep value? Of course this is all academic if you, or your broker , ignored the warning signs given by not two, but 3 tops at the lofty $52 level. On second thought, looking at this chart, I am not at all convinced that it is a buy. It is very clearly not a 5-wave down so far so more should be coming down the road. Of course at $5 there is not much to lose. Even so it could still be 100%.