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Underexposed - Canadian Stock Journal


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Underexposed - Canadian Stock Journal

  #501 (permalink)
SF, CA/USA
 
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very interesting analysis. i'm going to take some time to digest that.
Thanks!

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  #502 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Enbridge Income fund [TSX:ENF]

well the price of this stock has rocketed off into the stratosphere as can be seen in the chart below





the purple line shows the head fake that the stock was going to plummet.

See the decline in the MACD and Slow Sto were omens of a huge decline.... within the BB envelop the stock price was rocketing down... but look at the BBwidth... barely a ripple. If that drop was real then you would have seen a rapid rise in the BBwidth as the Bollies expanded...

But now the MACD , Slow Sto and BBwidth are sharply positive reflecting the bullish jump.

And what a jump it has been... What has caused this beautiful response???

well it is spelled out in this news release

Stock Market Quotes | Stock Market Quotes and Symbols

this is the the basics


Quoting 
Enbridge Income Fund to Receive Large Scale Drop Down Proposal From Enbridge

CALGARY, ALBERTA--(Marketwired - Dec. 3, 2014) - Enbridge Income Fund (EIF or the Fund) and Enbridge Income Fund Holdings Inc. (TSX:ENF) (EIFH) were advised today that Enbridge Inc. (TSX:ENB) (NYSE:ENB) (Enbridge), which is the sponsor of the Fund and of EIFH, intends to make a proposal to transfer its Canadian Liquids Pipelines business, as well as additional renewable assets, to the Fund (the Proposal). The transfer would be part of a broader financial restructuring plan announced today by Enbridge. Enbridge has indicated that, under the terms of the proposal, EIFH is expected to acquire an increasing interest in the business through investments in EIF over a period of several years in amounts consistent with its equity funding capability. Enbridge expects that the investments by EIFH will result in an average growth rate in the dividend on EIFH's common shares of 10% per year from 2015 through 2018.

........

The assets proposed to be transferred to EIF include $16 billion of combined carrying value of Liquids Pipelines assets with an associated secured growth capital program of approximately $15 billion, plus $1 billion of renewable energy assets. These assets are described more fully in Enbridge's news release.

this is great news...there is a 10% increase in the dividend + $16 billion assets generating revenue.

NORMALLY, I would be suspicious of such a large leap in price....far above the upper bollie. But this is great hard news. I can see this going higher and hopefully at a positive slope to re-enter into bollie envelope.

One must be vigilant when such a high jump over the upper bollies...but there is a good reason for it....

Exciting to watch and hold

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  #503 (permalink)
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Underexposed View Post
NORMALLY, I would be suspicious of such a large leap in price....far above the upper bollie. But this is great hard news. I can see this going higher and hopefully at a positive slope to re-enter into bollie envelope.

One must be vigilant when such a high jump over the upper bollies...but there is a good reason for it....

Exciting to watch and hold

Nice one.

Bollies become meaningless if either real 'hard news' or real 'herd news' takes over. If it's real a future mirror will show clear Elliott 3rd wave type behaviour, the main reason I dropped Bollies from my TA. From your fundamental analysis you already know when to discount them so you don't have that problem.

Great to watch.

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The following 2 users say Thank You to ratfink for this post:
 
  #504 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014


ratfink View Post
Nice one.

Bollies become meaningless if either real 'hard news' or real 'herd news' takes over. If it's real a future mirror will show clear Elliott 3rd wave type behaviour, the main reason I dropped Bollies from my TA. From your fundamental analysis you already know when to discount them so you don't have that problem.

Great to watch.

Thank you for your comment.

Yes, normal TA usually falls apart when there is a sudden change in the fundamentals, pro or con. I have in the past received a criticism that..."well your TA could not have predicted, such and such!"

The answer is no, nobody's TA could predict sudden rises or falls. Sometimes in 20/20 hindsight you can see small changes leading up to the event that look to support the change but in real time these changes are too subtle to act upon.

I do like fundamental analysis when searching for solid stocks to play long term. I wasted many years in the past playing weak stocks with the only thing going for them was the bullish run that they were in at the time I became aware of them. You can get trapped there as those gains can suddenly reverse FOREVER. Financially stable stocks have those reversals too but they usually are driven by sector or market influences beyond their control and they recover strongly as those market influences correct themselves.

I strongly believe there should be a marriage of the two types of analysis.

As far as Elliott Wave Theory goes, I have never been able to grasp how that works. The books I have tried to read on the subject were not very easy to read and at first when I started learning TA there was no charting service that method.

I use Stockcharts.com for most of my charting and found this basic description of Elliot Wave theory...Something I never looked at before

Elliott Wave Basics [ChartSchool]

I don't know if it is overly simplistic or not.

I have also discovered that there is an Elliot Wave tool in their "Annotated" version of their charts. I tried to play with it but so far (too early in the morning ) cannot figure how to use it... here is a graphic showing the chart and the tool location.





Perhaps you could shorten my learning curve and get me started on using this tool. then I can see how I can use it in my analysis... I am always open to adding arrows to my quiver

I can understand your initial aversion to Bollies they can be deceptive at times but hopefully I have been able to demonstrate their use...and yes...gapping, for whatever reason, renders Bollie use pretty much useless until things settle down again.

As always, your comments are appreciated

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  #505 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Status Dec 05/14 Friday

Here is the end of week status for this portfolio

Despite the great increase in the share price of the Enbridge Income Fund there has been an equally bad response of TD Bank. As a result we have a second negative week in a row...though it is 50% less than last time...if TD had not fallen and just stayed the same we would have had a positive result.

I will look at the charts for the components in this portfolio in my next post





NOTICE: the previous Excel mid week status show the results were for the Friday but that was just me getting ready for the weekend and forgetting to set the time to Dec 3

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  #506 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

analysis charts Lundin and Enbridge Income Fund

I am not going to to a detailed analysis on these chart...except a bit more devoted to the Toronto Dominion Bank which deserves a bit more analysis

Lundin Mining

You might recall a comment I made that is you choose solid companies financially then you don't have to worry too much about them going to wallpaper on you. If you invest in risky stocks on the rise and they plummet they may never recover....I have lost a lot of money chasing the latter before I learned that lesson.



you recall near mid of November I set a stop loss to protect profits that looked to be disappearing if the price fell further ... I set the limit stop loss with a range about $5.37 - $5.39... it worked like a charm to start with I raised the stop loss as the share price rose....willing to have it sold at any time there was a drop. I was at $5.65 -5.67 and then the stock tanked...it gapped lower than my Limit stock loss range so it did not trigger a sale. I prefer this as usually there is a pullback from a bottom and I don't want to sell at the bottom. It continued to fall for a couple of days.

I could have sold at any time but this fall had nothing to do with oil... nervous investor were selling anythin that had a profit..... so I cancelled that Limit Stop-loss and am please to see the share price rise...you can see a support at about $5.25.

the Sto Sto has not fallen below 50 and even has an uptick, the MACD has flattened and the BBwidth is continuing to fall...looking at the Slow Sto it will be 3-5 days until the "trigger zone will be gained...the price should move sideways til then.... no reason to sell.


Enbridge Income Fund

this is the star of the week....



this is a real jump as I pointed out earlier based on Enbridge placing additional assets into the income fund.

See the share price drop to the upper BB then bounce higher... early next week the upper BB may catch up to the price....but so far no decline... the three indicators below scream Bullish.

You note I sometimes add Parabolic Sar.... I believe its signal when the above price Par Sar hits the share price in the throat of a BB pinch....July 15 is a good example of that. Some people use this as a indicator overly to show when a rise is over (eg Aug 27)... but I tend to focus on the three indicators below and use the parbol Sar as just a confirmation. I believe this will be a winner for some time to come due to that acquisition.

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  #507 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

TDBank

the Toronto Dominion Bank price drop is the mirror image of the Enbridge Income Fund rise

Here is the chart




Another massive change that came as of the bolt from the Blue. Another stock in the collateral damage of the OPEC decision not to cut oil production levels.

There is news though on TD Bank in the form of a financial report

Stock Market Quotes | Stock Market Quotes and Symbols

It is the time all banks report I believe and this was not a particularily damaging but it did not meet analyst expectations and the results were less than the previous quarterly report...here are on the yearly and last year quarterly comparisons


Quoting 
FOURTH QUARTER FINANCIAL HIGHLIGHTS, compared with the fourth quarter last year:

Reported diluted earnings per share were $0.91, compared with $0.84.
Adjusted diluted earnings per share were $0.98, compared with $0.95.
Reported net income was $1,746 million, compared with $1,616 million.
Adjusted net income was $1,862 million, compared with $1,815 million.

FULL YEAR FINANCIAL HIGHLIGHTS, compared with last year:

Reported diluted earnings per share were $4.14, compared with $3.44.
Adjusted diluted earnings per share were $4.27, compared with $3.71.
Reported net income was $7,883 million, compared with $6,640 million.
Adjusted net income was $8,127 million, compared with $7,136 million.

Are they bad results??? Nopes, but investors are nervous and not meeting expectations caused the plunge of about 3%

Let's look at the P&F chart before looking at the Trigger chart again




Okay what was it's crime??? It attempted for an all time adjusted share price high (it has had a couple of forward splits in its time)

It is hardly going to wallpaper based on the financial report and this chart.

Now let's get back to that "Trigger chart"

the drop is real....the indicators did not give much of a warning....actually NONE worth acting on, before the drop. Yes the MACD was in a bit of a decline and the Slow Sto dropped a bit but that is normal in consolidation and the Slow sto was still over 80 before the drop....you would have had to be psychic to pick that time to sell hopping it would drop.

Now look at the last 2 days...FAR below the lower BB...and the last candle a doji that pulled back from even lower levels...I don't expect a sudden rebound but that bleeding should stop soon...not a magic rebound ...rather a sideways movement with a bit of a positive slope. A rebound like on Oct 15 is a bit much to ask for but it should trend back to the 20daySMA again soon.

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  #508 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Enercare and Badger Daylighting

Ok...Let us do the last 2 stocks in the portfolio.


EnerCare Inc

This is stock that has performed quite well in a rather quiet way....this is its chart





It may seem like it is an energy stock, so why did it not fall earlier because of the of the OPEC Oil production announcement???

Well names can be confusing some times.... this company makes its money through rentals and metering of water heaters of all things... obviously by the chart they are pretty good at it

Stock Market Quotes | Stock Market Quotes and Symbols

Its last quarterly report look pretty darn good.


Quoting 
Q3 2014 Financial Highlights

Quarter ended September 30, 2014 versus quarter ended September 30, 2013

(in thousands of Canadian dollars except per unit amounts)(1)

Total revenues increased by 4% to $80,469
Rentals attrition improved by 8% with nine consecutive quarters of year-over-year improvement in attrition
EBITDA(2) increased by 0.5% to $38,740: EBITDA would have improved by 8% to $41,926 after adjusting for Acquisition related costs
Payout Ratio - Maintenance(2) improved to 49%
Sub-metering sales activities were strong with 3,000 contracted units

.............


"It has been a tremendous year so far," said John Macdonald, President and CEO. "At the beginning of the year specific strategic priorities were established. We have stayed the course and good progress is being made on all levels. As a result, going into the last few months of the year, our operating segments have good momentum."

Macdonald continued, "Now that the acquisition of Direct Energy's Ontario home and small commercial services business is complete, we have taken our first successful steps towards integrating the two businesses. We continue to achieve our goals of a seamless transition with no impact on our sales or services levels."

Well now, Absorbing Direct Energy's Ontario home and small commercial services portends well for the coming year... and a nice Monthly 4.56% dividend

No reason to jump ship....it is in consolidation now for at least 5-10 days until the next BB squeeze.


Badger Daylighting

here is the chart





we are in consolidation after that downward fall as shown by all three indicators declining.... the Slow sto looks to be flattening just below 50 and that is encouraging...the MACD is still negative....the BBwidth is very slowly closing...it will probably be a month before the bollies tighten enough for another major ris or fall there looks like a support at about $28.75 or so... I can see it rising up to and twining around the 20day SMA

Conclusion

The effect of that OPEC (read Saudi) announcement not to cut oil production levels and resulting oil price drop, hit the Canadian market harder than those of the USA... we are a commodity nation...especially oil and other than the USA we cannot service foreign markets.... and the USA could not careless as they are flush with the black stuff.

You can see it in this 6 month comparison chart... how badly that announcement affected us




Well that is all for today and I won't be available until Tuesday due to my concert commitments


Good trading

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  #509 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Just a short note to say that the Concerts are almost over. We had two performances yesterday to sold out audiences of 500 people each performance. We have one more performance tonight and it will be all over til our next show at the end of February.

The markets are not co-operating with the TSX down about 360 points as I type. the stock that is most affected in this portfolio is TD Bank [TSX:TD] is is taking another huge hit of over $1 and remains under the lower BB.

the drastic fall has nothing to do with ACTUAL revenues which had a rise...it has everything to do with analyst expectations were not met.... which to me is not much of a reason at all. There is also a discussion about future expectations that don't sound too dire to me.

Here is a Financial Post on the subject of the TD Bank

Toronto-Dominion Bank profit misses expectations, warns of challenges ahead | Financial Post

here is a quote on those bad times ahead


Quoting 
Chief Executive Bharat Masrani said in the earnings statement that looking to 2015, he expects the operating environment to be more challenging and the bank would focus on organic growth.

Those challenges include slow economic growth in Canada and sustained low interest rates, said Colleen Johnston, TD Bank’s chief financial officer.

She noted the bank’s 2014 results were also boosted by acquisitions, a weaker Canadian dollar that increased the value of U.S. earnings, and a decline in credit losses.

“Next year we would expect credit losses to rise in line with volume growth,” she told Reuters.

“We are very focused on organic growth and we know we have lots of opportunities there. That’s not to rule out M&A (mergers and acquisitions), but we don’t have anything coming to fruition at this point.”

She also said that while the Canadian housing market appears to be overvalued, the bank does not expect a hard landing given low rates and a still expanding economy.
“We actually think our growth in that business will be slightly higher in 2015 than it was in 2014, our lending growth,” she said.

Oh yes, DARK days ahead based on these statements!!!!! NOT!!!

This is an opportunity to add to holdings when this dust settles, IMHO


Future topics

I think I have beaten my trigger chart to death for now though I will still use it a lot and reinforce features when I do use it.

I would be interested to get some feedback on a future topic that is of interest.

I could discuss other charts I use such as P&F, Sentiment (with ADX, RSI,CMF), Ichimoku plus( Onbal volume, CCI).

I would like to try Elliot wave charts... this is new for me but I know little about them so a discussion there would be interesting to me.

I would like a discussion on use of my trigger chart on forex and commodity futures to see if they work there but I don't have the software to generate the type of charts so would be needing some example charts from others to comment on.

Finally if you have companies that you wish a reading of a trigger chart, I am open to that too....especially if you are attempting to use my "trigger" chart but having difficulty doing so.

So I will leave the future direction open right now. After tonight my time will be my own again for a while.

Good trading.......

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  #510 (permalink)
SF, CA/USA
 
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awesome. i'll take you up on that. i trade some bonds (TLT), eurusd (EC) and airlines (LUV), so I'll bring up some of those charts a bit later on. It still confuses me when teh BB width decreases and what that means...because sometimes , the macd/stochastic are decreasing as well, and it's a true drop rather than a headfake. anyway, i'll bring that stuff up later. good luck with the rest of the shows!

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