Category Archives: SRL

Tencent Holdings Downside Targets

Posted on October 12, 2018 by | Leave a comment

Below are the downside targets for Tencent Holdings (TCEHY).

Leave a comment

Posted in speed resistance line, SRL, TCEHY

Ebix Inc.: Downside Targets

Posted on October 9, 2018 by | Leave a comment

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.

image

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.

Leave a comment

Posted in downside, EBIX, Speed Resistance Lines, SRL

Tilray Inc.: Parabolic Review

Posted on September 21, 2018 by | Leave a comment

On September 13, 2018 when Tilray Inc. (TLRY) was trading at $118.00, we said:

“Below we outline the downside targets for both current price of $118 and $236 for when/if the stock doubles from the current price.  The conservative downside target is fairly assured to occur in either case.  From the $118 level, a decline to the $66.67 level would be a natural retest of the $77.89 level set on September 7, 2018.”

Since September 13, 2018, TLRY has increased as high as $300 on an intraday basis with a closing high of $214.06.  From what we can tell, the runup has dissipated for now.  On the downside, we see TLRY declining to the $102.92 target at minimum and it may achieve the the extreme downside target of $66.67 as outlined in our previous posting.

image

The nature of a parabolic rise is the manifestation of the price going to extremes.  Speed Resistance Lines are the best measure of the extreme on the way down.  It is the same going down as it is for going up.  Therefore, we would not be surprised to see TLRY go as far down as $$42.42.

Leave a comment

Posted in parabolic, Speed Resistance Lines, SRL, TLRY

W.W. Grainger Downside Targets

Posted on September 19, 2018 by | Leave a comment

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.

  • $295.55 (conservative target)
  • $209.30 (mid-range target)
  • $123.05 (extreme target)

image

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.

Continue reading →

Leave a comment

Posted in downside, Edson Gould, GWW, Speed Resistance Lines, SRL

Harsco Corp: Target Update

Posted on September 18, 2018 by | Leave a comment

According to Morningstar.com, Harsco Corp. (HSC) “… provides industrial mill services to steel and nonferrous metal producers in more than 30 countries, including the United States.”

The history of Harsco’s (HSC) price history is important to the current activity in the stock price.  In the review, we cover the history of the stock price based on the Edson Gould’s Speed Resistance Lines [SRL] with Dow Theory.

Downside Target Review

In the period from 1982 to 1990, the price of HSC rose from a low of $2.50 to a high of $9.66.  Based on this information, we arrived at the following downside targets:

  • $6.39
  • $4.81
  • $3.17

image

We’ve highlighted the point made in Dow Theory that a stock will often retest a previous low after a prior peak in the stock price.  In this case, the retest level was the $5.88 price which was ultimately penetrated to the downside to the ultimate low of $4.50 in 1990.

In the period from 1990 to 2000, HSC had the following downside targets:

  • $13.85
  • $10.85
  • $7.85

image

The Dow Theory retest after a major decline lasted over a period of two years from 1998 to 2000.  All of the downside targets were achieved.

In the period from there was a decline that appears worth mentioning because it occurred within a rising trend that culminated in peak price that was three times the 2002 high.  In the runup from the 2000 low to the 2002 peak, HSC had the following downside targets:

  • $19.24
  • $13.29
  • $7.33

image

The Dow Theory retest after the peak was consistent and could have been at either of the two points indicated on the chart.  If you missed the first indicator then you had a second shot at getting the retest at the second major low in the stock.

Worth pointing out is the fact that the extreme downside target of $7.33, from a technical standpoint, was suggesting much lower levels than could be indicated on this chart.  We wonder if the low of HSC in 2016 at $3.67 might have been indicated in the SRL of 2000 to 2003.

2000-2018: Upside and Downside Targets

Below are the upside and downside targets based on the low of 2000 to the peak of 2016.

Continue reading →

Leave a comment

Posted in Edson Gould, HSC, retest, Speed Resistance Lines, SRL

Tagged

Advance Auto Parts: Price Targets

Posted on September 17, 2018 by | Leave a comment

According to Yahoo!Quotes, Advance Auto Parts (AAP) “… provides automotive replacement parts, batteries, accessories, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks.”

Below are the downside support targets based on the high of $199.38 and the upside resistance targets based on the $79.26 low.

Continue reading →

Leave a comment

Posted in 50% principle, AAP, Edson Gould, Speed Resistance Lines, SRL

ShotSpotter Inc. : Downside Targets

Posted on September 16, 2018 by | Leave a comment

According to Yahoo!Finance, ShotSpotter Inc. (SSTI) is, “…provides software-as-a-service based gunshot detection solutions for law enforcement officials and security personnel in the United States, South Africa, and internationally.”

ShotSpotter IPO’d on June 7, 2017 and was priced at $11.  In the last 15 months, SSTI has managed to increase the share price +471%. Based on the closing price of $62.81, we have the following downside targets:

  • $35.06
  • $28.55
  • $22.05

image

The downside target for SSTI are included in case the stock were to double for the current level.  SSTI could increase to $85.65 and still be within range of the $35.06 downside target.

Leave a comment

Posted in Edson Gould, parabolic, Speed Resistance Lines, SRL, SSTI

AeroVironment: Downside Targets

Posted on September 14, 2018 by | Leave a comment

AeroVironment is described on Yahoo!Quotes as:

“AeroVironment, Inc. designs, develops, produces, supports, and operates a portfolio of products and services for government agencies and businesses.”

Below are the downside targets as a consequence of the parabolic rise that has occurred since the September 2015 low.

image

The conservative downside target of $62.26 is a lock in our view.  To put this in perspective, AVAV would have to increase to $160.62 before the $62.26 level isn’t a normal “dip.”

Leave a comment

Posted in AVAV, Edson Gould, parabolic, Speed Resistance Lines, SRL

Tilray Inc.: Downside Targets

Posted on September 13, 2018 by | Leave a comment

The recent IPO and explosion of Tilray Inc. (TLRY) has investors both worried and excited.  Tilray is in the emerging corporate cannabis industry, which has high prospects.  Below we outline the downside targets for both current price of $118 and $236 for when/if the stock doubles from the current price.

image

The conservative downside target is fairly assured to occur in either case.  From the $118 level, a decline to the $66.67 level would be a natural retest of the $77.89 level set on September 7, 2018.

Leave a comment

Posted in Speed Resistance Lines, SRL, TLRY

Tesla: Downside Targets

Posted on September 8, 2018 by | Leave a comment

In this posting, we’ll covered the topic of downside targets for Tesla (TSLA).  We’re going to apply Speed Resistance Lines [SRL] and George Lindsay’s “Three Peaks and a Domed House.” 

The SRL downside targets are fairly conservative, in our view, while the 3 Peaks and a Domed House model (3PDh) appears fairly drastic.  We’ll do our best to introduce the 3PDh concept in the most general way possible, leaving out some of the nuances that we believe inhibit the qualitative elements to the overall concept.

Continue reading →

Leave a comment

Posted in 3PDh, Speed Resistance Lines, SRL, Tesla Motors

Starbucks Downside Target

Posted on June 13, 2018 by | Leave a comment

Below are the downside targets for Starbucks (SBUX) based on the work of Edson Gould.

Continue reading →

Leave a comment

Posted in Edson Gould, SBUX, Speed Resistance Lines, SRL

Tagged

Review: The Buckle Inc.

Posted on June 12, 2018 by | Leave a comment

On  June 16, 2012, we posted the following commentary on The Buckle Inc. (BKE) when the stock was trading at $36.79:

“We are very interested in this stock at the right price.  We believe that BKE will be a buy at $30 and below.  However, prior price movement based on Gould’s speed resistance lines indicated that the conservative downside target is $24.47 and the extreme downside target of $16.68.”

Since that time, The Buckle (BKE) managed to increase as high as $56.07 by January 12, 2015.  However, since January 2015, BKE fell as low as $13.70 on August 2017, on a closing basis.

image

One of the fascinating elements of the work of Edson Gould is that it can be extremely accurate in spite of incomplete data.  When we ran the figures for downside targets, BKE’s peak price was $48.39.  The peak price is part of the equation that helps to generate the downside targets.  In spite of this fact, BKE managed to decline below the extreme downside target based on the speed resistance lines (SRL).

Leave a comment

Posted in BKE, Edson Gould, Speed Resistance Lines, SRL

Interest Rate Monitor: May 2018

Posted on May 15, 2018 by | Leave a comment

Below are the revised downside targets base on the latest peak in interest rates.

Leave a comment

Posted in Interest Rate Monitor, SRL

Tagged

Quick Take: Cardinal Health

Posted on May 6, 2018 by | Leave a comment

On May 3, 2018, it was reported that Cardinal Health (CAH) declined –21% due to:

“…the company's loss of a contract with PharMerica and lower drug prices are responsible for the bearish outlook (TheStreet.com).”

The impact of these issues has resulted in lower 2019 earnings estimates for CAH.  Below are some thoughts on our expectations for CAH in the coming year.

Leave a comment

Posted in Altimeter, CAH, Cardinal Health, Edson Gould, SRL

Tagged

Ethereum: Downside Targets

Posted on February 5, 2018 by | Leave a comment

In a previous posting titled “Goldman Plays with Numbers,” we did a side-by-side comparison between Bitcoin and Ethereum in two different periods.  The periods in question happens to have the same percentage change, approximately +13,400%.

image

As with the same percentage increase, it is reasonable to expect the same percentage decreased that followed.  For the price of Bitcoin, it plunged –93.07% from June 8, 2011 to November 18, 2011.  Below is our charting of three scenarios for downside risk to Ethereum.

image

Based on the work of Edson Gould, the conservative downside target for Ethereum is at $617.09 (blue line).  However, due to the extremely volatile nature of cryptocurrencies, we have to expect that the extreme downside target is more than likely.  The purpose of putting the conservative downside target at all is to demonstrate that it will be achieved after a given peak in price is established and the trend is clearly to the downside.

In addition to the conservative downside target, we have indicated the level Ethereum would be at if it lost –93% (red line) as Bitcoin did in the period from June 2011 to November 2011 (yeah, it took only five months).  Such a decline in Ethereum would bring the price to $96.95.  We don’t expect this but must be realistic about the prospects regardless of our own personal expectations.

Finally, we have included our own worst case scenario (green line) based on one half the difference between Gould’s extreme downside target at $461 and the –93% experienced by Bitcoin in 2011.  This would bring the price of Ethereum to $279.31.  Although this seems like a dire call for Ethereum, in reality it is not unusual to see an –80% decline in price from such extreme parabolic moves.  Additionally, we don’t expect Ethereum to succumb to the same amount of pressure that Bitcoin did as the concept of blockchain technology is more salient to the general public today than it was in 2011.

Leave a comment

Posted in Bitcoin, ethereum, parabolic, SRL