Stock Update 11/19/2015: BAC, FOSL, GPRO


BAC: New for many. But we’re bringing this to your attention as it has the potential to add ~55% gains. Why? As it appears a massive bull-flag is forming: see white pattern on chart. So far we can count 3 waves up off the 2012 low and then a long big consolidation pattern. With the low at ~$14.25 and the high at around $18.20. The latter is the 223.6% extension of yellow (major) 1, as well as the 76.4% extension of blue (primary) I/A. We labeled that wave as I/A since we don’t know yet if this is a new impulse up (I,II,III,IV,V) or only a large correction (ABC). What we do see is a possible bull-flag which, if true, targets $27.25ish, That’s $10/share gain from current levels. it will target exactly the 400% (yellow) major extension, as well as around the 123.6% (blue) primary extension: III/C. Keep an eye on this; if it breaks out >$18.20 it’s a buy in our opinion.


FOSL: The energy sector has been beaten to death and there appears no end in sight. For this stock we can count 5 primary waves up to complete cycle 1. Since we can count 3 primary waves down, with price now in major 3/c of Primary C. Why “3/c”? Because we can’t be certain yet of the c-wave will form 3 or 5 waves. Most often it is the latter. What we do know is that c-waves target either the 138.2% or 161.8% extension of the prior a-wave, measured from the b-wave top. Price is now right at the former extension. IF it wants to target the 161.8% extension ultimately we should see at least a decent bounce develop from current price levels: If the major 2/b” bounce is any guide, the current bounce would then be to $50-$55 before the last wave takes price down to $11/$12: ultimate support. Hence, there’s $24 upside potential from current levels, but also $24 downside potential. We advice to watch and wait to see how things develop: anticipate, monitor, adjust. BUT, if it bottoms here or lower, we’ll have a cycle 2 low, and cycle 3 will take this puppy to new ATHs in the very long term. So consider this a serious head’s up! 🙂

FOSLGPRO: everybody hates it. Stock is being dumped as if it’s the worst company to every exist, while it is one of the very few new public companies that makes a consistent profit and beats Wallstreet’s earnings estimate time and again. Regardless: dump it. Why? Because when companies go public they are at the final stages of their first big wave up. In this case at the IPO, GPRO was likely in wave 3, and the $120 top was wave 5. Now price is in a big wave 2 down, and will retrace 50-62% of the ATH or 50-62% of the IPO price. Clearly the latter is the case. Don’t believe me? Look at FB, TWTR, BABA, FIT, etc. All these stocks either spiked and then dropped below their IPO, or dropped directly below their IPO. With an GRPO’s IPO price of $24 and a first open at ~$29; price should thus drop to $9-$15 before starting a new impulse. Now let’s put those numbers to the test. We can see clear impulse pattern since the Major b high: intermediate i,ii; minor 1,2, minute waves etc. We can also see that (green) minor 3 tagged the 138.2% extension of minor 1, from 2, beautifully. Minor 4 then retraced ~23.6% and price is now in minor 5 of intermediate iii. In fact the 361.8% extension of (red) intermediate i, from ii, is at $19.48. With yesterday’s low at $18.86, this extension may very well have been reached. Intermediate iv should then retrace back to $28-$35. Given that $28 area was strong support (initial opening day price) we expect it to reach this and not go much beyond. Intermediate iv should then target the 400% extension of intermediate i, which is $15. Right at the upper end of our predicted $9-$15 price range. Keep an eye on it when we get there!