Category Archives: Edson Gould

Clean Harbors: Coincidence Confirmed, Again

On February 9, 2012, we posted Edson Gould’s Speed Resistance Lines [SRL] regarding Clean Harbors (CLH).  Our hope at the time was that our prior work on the top of Gould’s work would be handily refuted or confirmed.  At the time we posed the following SRL:

For us, our expectation was that the Clean Harbors would, at minimum, descend to the conservative downside target of $43.53.  Well, the timing and coincidence were in our favor as CLH fell –40% to the appointed levels that we thought the stock should descend.

As with all Speed Resistance Lines, there is a chance that the stock will continue to move higher.  However, at each point higher we readjust the SRL and arrive at new downside target.  In the case of CLH, the stock increased from the $67.60 price to as high as $70.30 thereby requiring an adjustment of the downside targets higher as well.  Remember, if the stock does not hit downside targets avoid it.  When and if the stock falls to the target, review for potential investment.

Finally, for no explicable reason, when all seemed in favor of the stock, CLH declined from the $70.30 peak to the low of $37.09 achieved in January 2016.  By achieving such an improbable low (improbable to those who were buying CLH in February 2012) CLH stock price appeared to be worth considering.  For this reason, we iterated a review of CLH for investment consideration on December 14, 2015. Since our mid-December 2015 review, CLH has increased by +39%.

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At this point, we’d consider our general analysis of CLH a success from the December 2015 posting.  What do we see going forward?  We see two critical upside resistance levels to watch for.  The first upside resistance is at $59.00 and the second upside resistance level is at $69.00.  Obtaining a +39% gaining in a 1-year period might suggest that an investor consider selling all of their CLH holdings and reinvesting the funds somewhere else.

The Cold Hard Truth

Granted, luck and timing have a lot to say in any and all the work that we produce, however, that does not mean that our efforts on the topic should be dismissed as there may be some value in what we’re trying to accomplish.  Since the very first of our SRLs we’ve had more than 80% of the SRL downside targets achieved at the point of the initial examination.  This generally could could be considered a success.  However, of the 20% that have not been successful are positions that we’ve taken a real world investment in, which totally sucks.

In spite of the prevailing reality we continue to attempt to mitigate the available information with the stocks of interest to us.  We’ll narrow down this situation to a point where the SRL will work and/or we’ll still be able to benefit regardless of whether an immediate rebound is experienced.

Nasdaq Biotechnology ETF

The iShares Nasdaq Biotechnology ETF (IBB) is trading in range that ultimately needs to be resolved.  The outcome is either falling dramatically below $240 or striking the $343 level before doing a retest of the prior high around $400.

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Already, IBB has managed to resist falling below the ascending $218.37 level.  This is in defiance of our belief that a highly volatile sector and fund should retest the extreme downside target of $133.60.  Those wanting to have exposure to the biotech sector but unwilling to take on the individual risk should consider the prospects of this ETF.

Nvidia Downside Targets

Below are the downside targets based on the work of Edson Gould and the precedent setting periods from 1999 to the present.

Ritchie Brothers: Now What?

In our June 12, 2016 posting titled “Ritchie Brother: Inflection Point?” we said the following:

  • “…it appears that [Ritchie Brothers] RBA is at a threshold that has not been exceeded since early 2011”
  • “…the stock could rise to $48.00.”
  • the stock needs “…some kind of reprieve from the most recent parabolic move in the price”

Since June 2016, RBA has managed to trace out the following price action (in red):

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As the last bullet point indicated and the price chart has reflected, the parabolic move was resolved with a decline to the recent low of $27.27.  Unfortunately, we now need another parabolic move from $27.27 to the recent jump above $35 to be resolved in some way or another.

Another item that was pointed out was the possibility that RBA could exceed a level in Edson Gould’s Altimeter, a level that had not been exceeded since 2011.  The recent price action since June 2016 has allowed this to occur as well.

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We’re still thinking that the rise to $48 is possible.  The recent news of the acquisition by RBA of IronPlanet makes it more possible to hit our target.  However, the recent price activity of going from $27 to $35 overnight based on an acquisition simply means that achieving the $48 target will take more time than we had anticipated.

Downside Targets for Craft Brew Alliance

The latest run for Craft Brew Alliance (BREW) from the low set in November 2015 to the most recent peak on August 2016 requires that we check for the downside targets.

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 A parabolic peak is one thing.  However, having them play out in a consistent fashion is something else.  In the case of BREW, we’ve had two prior parabolic peaks since 2008 that were true to form and function.  In the period from the 2008 low to the 2010 peak, BREW declined to below the mid-range Speed Resistance Line [SRL].  In the period from the 2008 low to the 2013 peak, BREW declined below the extreme downside target.  In the chart above, we have the following downside targets:

  • conservative: $12.57
  • mid-range: $10.02
  • extreme: $7.47

Although there is no assurance that the stock needs to decline to the referenced downside targets, any parabolic move must be watch closely as entropy will kick in at some point.  In this case, we believe that the ascending conservative target is a lock.  With established history as an indication, the mid-range target looks to be a safe “bet” as well.  We’ll check back in on this as more time has passed.