On November 20, 2015, we posted the Speed Resistance Lines for Mercury General (MCY). The downside targets were:
The chart below highlights the date the SRL was published and the price action that has transpired since November 20, 2015.
Our lurking worry? That the $20.10 target will be achieved. This leads to a downside range of $18-$20 from the current price of $38.88.
Posted in downside, Edson Gould, MCY, Speed Resistance Lines, SRL
On February 3, 2018, we said the following:
“In the past, we would normally apply the more passive Dow Theory downside targets instead of Edson Gould’s Speed Resistance Line. However, with the late stage parabolic move in the Dow Jones Industrial Average, the more aggressive downside targets are necessary in this instance.”
Our decision to utilize the “more aggressive downside targets” has proven to be well founded. However, since the February 3, 2018, a new peak has been achieved which provides different downside targets. This leads to an update of the downside and upside targets.
Below are the updates with extensive review of what to watch for (skip to the bottom for the Summary). Continue reading
Below are the downside targets for Tesla Inc. (TSLA).
Parabolic increases rarely go unchecked. This typically means that a decline to the conservative downside target is the norm, at minimum. However, Tesla has had a history of defying the “norm” when it comes to price change.
Posted in downside, parabolic, Speed Resistance Lines, SRL, TSLA
In reviewing the price history of Palladium and in light of the most recent parabolic increase, we have outlined the current increase in the price and compare it to the 1996-2003 rise and decline.
1996-2003
In the period from 1996 to 2004, the price of Palladium increased +837% and subsequently declined from the peak by -86.05%.
The chart above includes the Speed Resistance Lines (SRL) based on the work of Edson Gould. In this specific instance, the price of Palladium declined through all of the downside targets. In addition, the continued until it reached a low of approximately $150.50 or -58% below the $359.67 Speed Resistance Line.
In the following review of the most recent increase in Palladium, we’ll compare the 2016-2020 run-up to the increase from 1996 to 2001 to identify the signs of what might come in the price going forward.
Then v. Now
Technically Speaking
When looking at the price of Palladium in both periods, we have identified the most important points contributing to our analysis.
The start to our review is the first intermediate peak after the low. In the case of the 1996-2004 period, that first peak was at $397.50. For the period of 2016-2020, that peak was $1,119.90. The subsequent lows that followed, $272.20 and $877.80, helped to establish the downside targets.
Worth noting is the decline from the initial peaks to slightly below the mid-range downside targets before a continuation of the rising trend to the second intermediate peaks at $718.50 and $1,520.35, respectively. In both cases, the decline from the second intermediate peaks are situated around the conservative downside targets at $631.87 and $1,627.93.
In both cases, the parabolic move ensues after the second intermediate peak, which is a considerable distance from the level of the conservative downside target.
Conclusion
Because of the precedent set in the period from 1996 to 2001, we expect that the conservative downside target of $1,627.93 will be achieved.
We could consider it luck if the price of Palladium were to decline to the mid-range level of $1,189.03 or the extreme target of $750.13. However, if the period from 1996 to 2003 is truly a precedent setting period then it would not be surprising to see Palladium decline to $750.13 as a normal reaction to the parabolic increase.
Posted in downside, Edson Gould, palladium, parabolic, Speed Resistance Lines
Below are the remaining downside targets for the Hang Seng Index when applying Dow Theory: Continue reading
Posted in Dow Theory, downside, Hang Seng Index, HSI
Below are the downside targets for Netflix (NFLX).
Below are the downside targets for Roku Inc. (ROKU).
Our experience with all Speed Resistance Lines is that the conservative target is going to be achieved, no matter the reason. The targets are as follows:
Posted in downside, Edson Gould, ROKU, Speed Resistance Lines
According to Coindesk, Bitcoin achieved a high of $13,884.77 on June 26, 2019. Based on the data provided by Coindesk, we have the following downside targets: Continue reading
Downside Targets Continue reading
On September 13, 2018, when Tilray (TLRY) was trading at $118.00, we offered downside targets for $118 and $236 price points. Unsurprisingly, TLRY closed at a price of $214 on September 19, 2018. At the time we said:
“The conservative downside target is fairly assured to occur in either case.”
The conservative downside target at $118 was $66.67 and at $236 was $102.92.
On September 25, 2018, when TLRY was trading at $114.00, after the stock traded as low as $99.50, we gave upside targets of $156.78, $176.26, and $195.16. Our closing commentary was as follows:
“Upside retests determine if the price of the stock will continue on the move beyond $214.06. This is where speculators make their money, on the prospects of an +86% increase.”
TLRY made it as high as $165.64 on a closing basis. The failure to achieve $176.26 target suggested that the downside targets from the closing price of $214.06 would be the extreme downside target of $78.67, as noted in the September 13, 2018 posting.
Currently, TLRY trades below $75. Although the extreme downside targets have been acheived, there are indications that TLRY will retest the pivot level at $34.
Downside Targets
The downside risk from the current price, is as follows:
Simply by declining to $60.72, speculators should build in plans for TLRY to go to the $34.00 price point.
Posted in downside, TLRY, upside target
Below are the downside targets for Facebook (FB) based on the decline from the July 25, 2018 peak at $217.50. Continue reading
Posted in downside, Edson Gould, FB, parabolic
On April 14, 2012, we provided the following downside targets for Apple Inc. (AAPL):
| pre-split price | post-split price |
| $424.15 | $60.59 |
| $297.43 | $42.49 |
| $212.08 | $30.30 |
| $117.05 | $16.72 |
Along with the downside targets we included a charting of the expected levels, as seen below on a split adjusted basis:
On July 17, 2013, we said the following of of Apple:
“Currently, Apple is demonstrating a basing pattern that if successful, could result in a breakout to the upside. At the current levels, we wouldn’t be opposed to buying some shares of Apple with the expectation that the stock could decline an additional –25% to –35%.”
Since July 17, 2013, Apple’s price has seen the following breakout to the upside:
Below are the Speed Resistance Lines based on the work of Edson Gould as of November 19, 2018. As has been the case in the past, we can only be confident of the conservative downside target being achieved. Continue reading
Posted in AAPL, downside, Edson Gould
On November 21, 2015, we said the following:
“While a Fed rate increase is what everyone is waiting for, history suggests that Fed policy (government regulated) follows short-term Treasuries (market driven).
“In a barely perceptible way, the chart above demonstrates that all Federal Reserve rate increases were preceded by a rise in the 3-month Treasury. The blue arrows indicate the reversal in the declining trend before 3-month Treasuries increased. From this point, we can easily see that the Federal Reserve’s discount rate follows to the upside not long after. We’ve only included the point in the interest rate cycle that corresponds to the phase that we are entering, coming from an all-time low to an eventual all-time high.”
We are clearly in the early stages of a secular rising trend in interest rates. As noted above, the direction is up for the foreseeable future. What concerns us now, as always, is the cyclical declines which can be dramatic. Below we trace out the first decline in the previous secular trend and see what that would look like in the current rate environment. Continue reading
Ebix Inc. (EBIX) is described as a, “…software and e-commerce solutions to insurance, finance, and healthcare industries. It offers software development, customization, and consulting services to various entities in the insurance industry, including carriers, brokers, exchanges, and standard making bodies.”
The recent decision of Ebix to change their accountant is explained for the recent drop in the stock price. Although, to our mind, the stock price peaked in February 2018 which set the declining trend in motion. Below are the downside targets for EBIX.
At the current rate, EBIX appears destined for the $41.98 downside target. The relative nature of the increase in the stock price from around the $10.00 level to $86.90 makes the $28.97 price a distinct possibility.
Posted in downside, EBIX, Speed Resistance Lines, SRL
W.W. Grainger (GWW) is a stock that we currently hold and has run-up significantly in the last year. In this post we will review Edson Gould’s Speed Resistance Lines [SRL] and Altimeter for GWW.
Speed Resistance Lines are most often used by us to estimate downside targets. Based on the increase from the August 28, 2017 low and the August 21, 2018 high, we have arrived at the following downside targets.
It should be noted that the chart above does not include the extreme downside target. If the August 21, 2018 price is the peak then our best guess is that GWW will decline below the August 28, 2017 low. Our interpretation on the SRL may not play out for a while, however, the Altimeter adds significant insight.
Posted in downside, Edson Gould, GWW, Speed Resistance Lines, SRL
