The Trading Deck at MarketWatch (A Wall Street Journal Publication) has just published my Elliott Wave article on using Elliott Waves to invest in Mid Caps
Elliott Wave Analysis of EasyJet as posted here on 6 May 2012 suggested a three step move as follows: First a recovery from the then current 514 levels to 533, followed by a dip to around 470 after which a rally to 595. Here is the link for that post: Eliott-wave-analysis-of-easyjet-plc
Guess what happened! The stock went to 536, came down to 474 and rallied to 599. It is currently trading at 585. So we pretty much anticpated a 25% move with all its twists and turns. I am not aware of any approach to technical analysis other than Elliott Wave Analysis that can do this so effectively!
In my original post, I suggested that once we complete this move, there is a chance for a move back down to 470 levels. As you are aware, with new information we are always in a position to fine tune our levels. I now believe that if we get a move to 615, it might be a good idea to lighten up and get ready for a sell on this stock. Infact, even from 595 one should start selling off one’s holdings in stages. I mention 615 because the 620 level seems to be where the fifth wave could finish. I arrive at that level using the same techniques explanined in my book “Five Waves to Financial Freedom“. It has been my experience that it never pays to wait for the absolute top to exit one’s existing positions. It is fine to be patient to take a counter trend trade as close to the computed top as possible. That way, we can minimise any possible losses should the market continue to take the stock higher. But having identified 595 as the initial objective, we should have no qualms in getting out of any longs that we may have from near 470.
There is so much happening at Barclays Bank that I thought it deserves a look at the chart and see if we can get any clues. SO here you are..As always, please remember that WaveTimes in its current form is only sharing with you my knowledge of Elliott Wave Analysis. If you take the views as trading advice, you also need to know how to manage the positions and that does not figure here! If you wish to learn how to use Elliott Waves then you have my book “Five Waves to Financial Freedom”..
There are strong Elliott Wave reasons to think Glencore stock (GLEN:LSE) is all set to continue its dive in the coming weeks. The decision by Qatar Holdinigs to seek improved merger terms sent shock waves up the spines of those who were hoping for some stability in Glencore’s stock price. Let us take a quick look at the chart of Glencore PLC and see what is in store.
ELliott Wave Theory says that any one impulse wave in a five wave sequence is likley to extend. Clearly, Waves 1 and 3 were both of normal proportions for Glencore. Thus, it looks like we should expect the selling to intensify, especially on any close below the 265p level. Why is the 265p level important? At that point, the stock would have reached its equality measure of the first major sell off from 559 to 341.
HOw can one trade this? I think any recovery to around 298 should be used to get out of stale longs. It is doubtful if we will close above 303 in the near term. As a first step, take partial profits below 277 and some more at 266. Once we get a clear break below 265, we should think of finding fresh levels to add to shorts. But for now, although we should be prepared for the worst (which is a 25% loss), let us be content with a 9-10% profit.
Let us see what Elliott Wave Analysis of EasyJet Plc suggests about the possible future direction for this stock. This low-cost passenger airline that conducts operations throughout the United Kingdon and mainland Europe has seen its stock recover nicely from around 300 pounds seen in July 2011. It is currently trading at 514.50.
As always, I have posted additional comments directly on the chart to make life easy for you! Enjoy.
In today’s Financial Times, I read an interesting article by Paul Murphy that started off like this: “About 40 teams of sell-side analysts cover Tesco, the nation’s leading grocer, slavishly updating their forecasting models with every grain of fresh shopping info. Did any of those number crunchers fully anticipate the recent “strain” on Tesco’s profitability and the subsequent warning that profit growth in the coming year will be “minimal”? Not if the share price reaction is any guide: down 16 per cent on the day of the news” Here is the link That opening statement got me thinking. If we had looked at this chart a few weeks ago, what would have been our recommendation? Well, the chart is presented for you to study. Some of the non-believers might say that this is all after the fact. But our response to them is two fold. First, take a look at the hundreds of examples in this blog that anticipated prices before the event. Second, we are saying where this stock is headed – GBP 245, and we are giving some reasons for that. When an extended fifth wave finishes, we should look for a swift sell off to the second wave level within this fifth. Pass this on to your sell-side analysts, and certainly to your friends exposed to UK stocks.Maybe they haven’t heard of “Five Waves to Financial Fortune” yet! Enjoy!
Just over 3 weeks back the Wall Street Journal reported in its Market Watch that analysts were saying BP’s tumble on oil spill was overdone. It quoted analysts’ target of 730 pence for the share from its current level of around 575 pence.
Elliott Wave Analysis of BP however pointed to the opposite direction, and I had put out a chart on 4th May 2010 suggesting we will head towards 310. I also mentioned that the stock will likely remain weak at least until early 2011.
Today, Bloomberg reported that BP has abandoned its latest effort to stop the biggest oil spill in US history (and also the resignation of some more of BP’s fuel traders). Some columnists are now suggesting that it is not just BP’s dividends that is at stake, but the very independence of the company. The result: BP’s 5-year credit default swap has widened by 71bps to 173bps, and the stock has lost 13% in just one day. We are currently trading around 425 and our target of 310 will probably be reached before I return from holidays. Take care.
Today I came across a report where an analyst was calling for BP to reach 730 pence from its current level of around 575.50. However, from an Elliott Wave perspective, the outlook for BP doesn’t look so rosy. I am of the view that we are headed a lot lower. Take a look at these two charts. The first chart on BP shows that wave 3 was extended, being 3.618 times wave 1. We also see that wave 4 was an irregular correction, which follows the elliott guideline of alternation. The 2nd chart confirms that the 5-wave progression was finished around 722 and so a full-blown correction was due anyway. Wave A of the anticipated 3-step correction was finished and we also got a wave B before the oil spill news hit the market. So we have probably embarked on wave C which has targets at 310.
Updt: 7 May 2010: Someone asked me a question about the 5-year time frame for the correction. Remember, that time runs from the top of wave 5 (at 722) and not just for wave C. As that top was posted in early 2006, the correction will last at least till early 2011.
Today the news is Barclays Bank went to a three-month high on market optimism fueled by some nice numbers from US Bank Goldman Sachs. So I decided to take a look at what the charts tell us about Barclays.
Like most other big banks, Barclays shares have been pounded. The stock fell from 773 to a mere 47. But hey, don’t you wish you had bought it at 47 because it has already quadrupled in value! But never mind, We can’t be aware of all the opportunities around us! So let us see what else one could do with Barclays.
For starters, this move seems to have some legs. Assuming we get a fifth wave that extends all the way to 240 levels, then that should be where the stock could suffer exhaustion. A swift sell off should follow a fifth wave extension. (Extending fifth waves can be very profitable. For example, read this case study on USD/YEN)
If you are going to sit out the whole move for the time being, then that is also not a bad idea. You can always jump in for the THIRD wave move on the long side AFTER you get the sell-off that will hopefully follow a fifth wave extension.
Take a look at the two charts here, where I have given you Elliott Wave Analysis of Barclays Bank. If you are used to Twitting, then these comments are a great subject to alert your friends. Enjoy.