Current snapshot shows that we are near the model's target buying range. Now that they have thrown this company in the trash, large percentage swings occur on just a few tens of cents. Safest way to play is to buy 1/3 position when the target price is hit IFF you see a wave count that can be justfied as complete. Stops just below the buy point. Then wait for the falling trend line to break out before adding into strength should the model play out as expected.
Of course, the model could bust as well so I would certainly use stops even at this price. This is still not "great depression" cheap with a price : book of 1.6 although price:sales is a very low 0.22.
Captain,
ReplyDeleteSpeaking of the energy sector, if you've got the time and inclination would you mind taking a look at CNX? I've been absolutely horrific in charting this one and would love to see your analysis.
Cheers!
Hi Chance,
ReplyDeleteI think it trades with the rest of small oil. I don't have the time to do a real good wave count (it takes longer than most people think to really do the deep dive needed) but I will clue you in to just look at Friday on the 1 minute scale. The rally from ~$6.88 to the peak at $7.56 was 5 waves and then A and B back down. Monday should be a head fake lower into C of 2 stopping somewhere between $7.26 and $7.29.
If that happens, buy with a next wave (likely 3 or C) price target of $8.25.
I think that money will begin moving out of worthless stocks like Amazon back into commodities in the not distant future. Goldman talking about inflation is not going to be shrugged off quickly by the markets IMO and what better place to be than in over-leveraged commodities when inflation begins to kick in. It devalues their debt and sky rockets their revs at a time when they have already cut over head to the bone and have worked tirelessly on being more efficient just to save the business (i.e. real motivation).
Great stuff Captain. Many thanks for your time and analysis!
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