TM

TM, Toyota (ADR’s)

Hamilton

TM march 17 2015

For at least the length of this chart Toyota has performed exceptionally well. The Corolla is one of the most durable and uncomplicated vehicles that you can find. In the last 10+ years they have received an enormous boost from China which is now the World’s largest car market. As always for 1000 years nothing happens and then in a very short time period 1/4 of the population makes the transition from bicycle to Lexus and there is no end in sight (except if and when congestion rekindles the popularity of the bike).

Looking at this chart what strikes me most is the consistency or persistency of this stock which has adhered to the channel , between the black arrows, for almost the entire time. Only seven years out of 36 does the stock venture above the channel and, equally interestingly, never below it! The count that we show here has the top in 06/07, followed by an A down and  B up. However the B is not very clearly a three wave affaire , in fact one could argue that there are 5-waves. That really doesn’t matter as all it does is put the top right at the end. Double-topping – where we are now – is then probable going to give way to a new high at around $150+. After that it should go to the lower channel line at about $70 by that time or even below that. A sell now and a short at $150+.

TM, Toyota.

Hamilton

Back in March we thought this was a good sell (see previous blogs). It followed the script perfectly. Just the other day the company announced that profits would essentially drop by half as the result of flooding in Thailand that reduced the sales of cars by about 250,000 units and by the strength of the Yen which the company says must be above 90 against the US dollar to stay profitable.

Toyota Motor Corp. ADS, TM Advanced Chart - (NYSE) TM, Toyota Motor CorpTM dec 10 2011

The stock should move below $40. It is not exactly clear how it will do this but at this time it looks like the stock is forming an irregular flat wave 4. It may not go above $75 or that scenario would be negated. This is actually a nice trade as you only have $7 or so to the upside and at least 4x as much to the downside.

F, GM, TM (Toyota)

Hamilton

 

tm32011

First Toyota. The big chart should bring tears to the eyes of the true EW(avers), in that it follows all the pragmatic little rules and guidelines perfectly, so far. My drawing is simplified just to get the message across better, but in reality wave 3 tops one block lower as wave 4 is most likely an irregular zig-zag. The top line should go through the top of wave 1. The result is that wave 5 is equal to 1 and 3 combined, there is alternation between 2 and 4 and the 3d of 3 is extended. All picture perfect.

Typically correction take a stock to the level of the 4th wave of previous degree, roughly $40. Furthermore, again this is typical, the stock loses at least 62% of its value, about $50. It has done neither of these,yet. It will , if it keeps behaving.

f32011

Ford has pretty well also done what it should having completed a first wave up, right into the level of the 4th wave and at about the 50% retracement level. From there it has dropped in, what appears to be, a very nice 5 wave down for A. If you are courageous the next B wave up should be good for $3/4 to the upside, but after that the stock should go down in the c wave  to at least $10 (but possible $7).

GM peaked after its public offering at the beginning of the year. Since then it has dropped below the issue price. There is little chart to go by but what little there is does not look promising.