Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi, in any five wave sequence, wave 3 is generally travels the furthest distance, but it cannot be the shortest wave or the sequence is not impulsive. So if wave 1 in this example was approx. 5 units or pence, then the next impulse wave, after this wave 2 correction has completed, will travel a greater distance than wave 1, possibly 6/8 units or pence from the bottom of wave 2. Need patience to see how this unfolds.
From the lows around 26p a five wave advance has unfolded to the high at approx.30p, wave1 of (5) The pullback to date is in three parts and very muted, so corrective to the previous impulse wave, a wave 2 of (5). If the sequence is correct, then wave 3 to the upside should be the next impulse wave to unfold. All the best.
The best probable target for EW5 with no fifth wave extension, is late thirties to early forties. As the 5th wave unfolds, it should be possible to get a more accurate count, and a target for this move. Best of luck.
Price action from the lows at approx.18p, looks to be tracing out a textbook five wave advance. With the strong move up today, wave 4 looks complete and alternated beautifully with wave 2. (Wave 2 was the small retracement back in Feb with wave 4 the larger retracement in terms of time and price from the highs around the 10th March.( The top of wave 3). Also note that Wave 4 did not overlap the top of wave 1, thus confirming this move is impulsive against the previous long term downtrend trend). Would now assume that wave 5 will move above the highs of wave 3 at approx 34p, before completing this sequence, a five wave advance from the lows. Long term a very positive wave count.
There is now a high probability that wave 4 of higher degree bottomed around 286 on the 11 March. The sharp rally that followed to 324 overlapped the previous wave 4 of lower degree at around 313 meaning that this initial rally off these important lows cannot be corrective to the main trend over the past few months which has been down. So this rally could be a the start of wave 5 of higher degree from the 2009, on the short term time frame a small five wave advance can be counted, supporting this view, minor wave1. The decline over the past two days can be counted as a minor wave 2, ( it cannot break the lows of wave 1 at 286), with a sharp move up in a wave 3 about to start. If this wave count is correct, then a target can be put forward for wave 5 of higher degree. The most common relationship is that wave 5 has equality to wave 1 of the same degree. So wave 1 of higher degree, from the March 2009 lows at around 55p, had a high at around 270 in August 2009, a gain of some 215. If wave 5 of higher degree has begun at the bottom of wave 4 at 286 then the price target for this wave 5 of higher degree, is at least 5.00.
C of 4 looks almost complete with just minor 4 and 5 to come, with support between top of wave 1 of higher degree, August 2009 high and the 50% retracement of the whole advance from the March 2009 Lows and the August 2015 highs at around 281. Again the smart money looks to be taking advantage of this wave 4 of higher degree, before a wave 5 of higher degree takes the SP back above the August 2015 highs.
A near £2.00 decline since the highs last August has left the shares trading at a very discounted 25% to net asset value, and a bearish consensus in place. All par for the course for a fourth wave of higher degree which is alternating with a wave 2 in a near perfect way. From the March 2009 lows the SP advanced in five waves to a high at around 268p in August 2009. The SP then declined over 27 months to a low in November 2011 at 100.50p, a three part pedestrian decline with a large a wave, and a small b and c wave. The decline was larger in terms of time than price. The impulsive rally that followed can be labelled as a wave 3 of higher degree and can be broken down into five waves, with a peak in August 2015 at around the 500.00p. The decline from the August peak has been sharp and impulsive and has retraced 50% of the advance from the bottom of wave 2 (November 11 low), and can be labelled as a wave 4 of higher degree of this bull move from the March 2009 lows. The degree of alteration between wave 2 and wave 4 is almost perfect to date and providing wave 4 does not overlap wave 1 in any way then the long term bullish count remains in play. This wave 4 is currently 7 months old and five wave decline is already clearly visible and nearly complete, a sign that a low may be close at hand. Perhaps the smart money senses this and are thankful for the opportunity this wave 4 is providing.
Back to the fundamentals. A good article in the Evening Standard tonight, where Marks gives more information regarding the turnaround of the business and expansion plans. Interesting to see the trial of pop up shops in train stations has been very successful. Pity this information was not in the RNS this morning. This is just more evidence of the potential of this company with a market cap of less than £60m on today's close. Best regards
Back to the technicals. Sticking with the bullish count. From the lows around 58p on 10 Sept to highs at around 70p yesterday can count 5 waves up to complete minute 1 of minor 3. Todays reaction looks like minute 2 of minor 3. Minute 3 of minor 3 may be already upon us and the beginning of another wave to the upside. This being the 3 of 3 in this sequence this motive wave should travel the greatest distance. Furthermore, as dalooks1 correctly points out, if you read the detail in the update it is very positive, with some significant changes happening in the business. But as ever it is in the detail. Best regards
Back to the technicals, horizontal resistance at the top of wave 1 has been well and truly broken on the weekly close above 62.30 level, signalling that wave 3 has begun. This impulse wave should comprise of 5 minute waves and have commonality in terms of time and price with wave 1 as discussed in the previous update. The Fibonacci relationship of 1.382 and 1.618 can be applied to this structure assuming there is no wave extension. In any impulsive wave of any degree, either wave 3 or 5 extends, but it is most common to find the extension in wave 3. If this occurs the next Fibonacci series can be applied in the commonality with wave 1 using the following numbers, 2.382 and 2.618 . Therefore, if wave 3 extends then the price targets would be 90.5 and 94.42. As always most important to monitor and observe how the count unfolds, and then label accordingly. Best regards
Apologies, in the previous message the last sentence should have read, minute 2 of Minor 1 appears to be still be in play as a close above 62/62.30 level, the high of minute 1 is need confirm the beginning of Minor wave 3. The price action today allows this confirmation that minute 2 is complete and that wave 3 has begun. As there tends to be commonality between wave 1 and wave 3 of any degree, based on the Fibonacci relationship of the distance travelled in wave 1 x either 1.382% or 1.618%, the targets for this wave 3 are 76.5 and 80.15. Best regards
Hat tip to dalooks and Benjiben for your for very informative updates over the past week. Yes agree retailers are having a good time of late, as Supergroup and Laura Ashley both confirmed with their excellent updates over the past week. This was despite negative press comments pre updates, which proved to be to downbeat. But back to the technicals for FCCN. Minute 1 of minor 2 appears still to be in play as a close above the 62/62.30 level, the high of minute 1, is needed to confirm the beginning of wave 3, and some bullish price action. Best regards
Back to the Technicals. The small sell off last week has now allowed the rally off the August lows at 48p to the highs around 62p, to be labelled as Minute 1 of Minor 1 of intermediate 5.(This is the preferred count at present). The decline currently in play to date has retraced 38.2% of the previous advance, with the low at around 57.2p and can be labelled as minute 2 of minor 1. The decline so far looks to be forming an a simple three part move which is corrective to the previous wave,which was to the upside. There is no evidence wave 2 is complete with only a move above the high of minute 1 at around 62p allowing confirmation. Should this happen, then this will signal the start of wave 3 and some very positive price action. As there tends to be a Fibonacci relationship between the first wave and the third wave in any impulsive sequence, it will then possible to possible to calculate a series of targets for wave 3. That is the next step on any confirmation that the third wave has begun. Best regards
Back to the technicals. The upmove developed last week and there is now enough evidence that the symmetrical down channel in place since mid May has been broken to the upside. Furthermore, there has been an overlap of the first five wave decline from the May highs ruling out the current upmove as a wave 4 corrective rally, as wave 4 cannot overlap wave 1 in a trending sequence. Therefore it is highly probable that the decline from the highs in May completed an intermediate wave 4 in the form of an ABC, 5,3,5 correction of the previous implusive wave to the upside. If that is the case then this new uptrend can be labelled as such, and could take the form of two bullish counts. The first and most likely is that this is intermediate wave 5 of this uptrend from the lows in 2012 at around the 20p level. Intermediate 5 should take the form of three implusive minor waves to the upside 1,3,5 with two corrective waves 2,4 in between, which should alternate in terms of time and price. If this is the case then this 5 impulsive wave has a high probability of exceeding the intermediate wave 3 highs posted in May at around the 93p level. Currently the rally is somewhere in minor 1 of intermediate 5 and is right on horizontal resistance at the 61.5p level. Once this wave is complete, and there is no evidence of that yet, a wave 2 decline should retrace a proportion of this advance before the 3 wave begins. Please remember that the third wave in any sequence tends to be the strongest and most powerful. The second and most bullish count is that this is a rally of cycle degree, not intermediate, with each rally and then decline since the 2012 lows forming a 1/2 1/2 sequence, with a cycle degree wave 3 now in its infancy. This would be very bullish and the rally from such a move would likely exceed the previous high in May by some margin. But again the key here is not to look to far ahead and observe the price action as it unfolds and label accordingly. Best regards
Back to the technicals. After what looks like a selling climax on high volume last Tuesday the price has picked up and the wave count is unfolding in an interesting way. Firstly it appears, that in the short term time frame the triangular pattern in 4 of 5, failed in what looks like a fifth wave failure to the downside, with the characteristic of a strong move in the opposite direction. From that point in the short term time frame, a 5 wave advance has unfolded to the upside, with only a small pullback in what looks like a minor wave 2. The next positive is that the rally of the past three days has moved back through the wave 4 of previous degree and overlapped wave one of previous degree, thus increasing the probability that the decline from the May highs is over. This probability would be further increased if the price action could move above the down channel which has been place and falling since around 15 May and has turned back each wave to the upside since this date. One of the key tenants of the wave theory is that price action moves in symmetrical channels and that the current down channel has a level in multiple time frames of around 54p on Monday. A move through this level would be very positive and would begin the process of initiating a new up channel. So from here the key is observation and awaiting to see whether this upmove can develop further, and thus allow it to be labelled as such. Best regards
Hat tip to dalooks again with your observations. It has been a great summer and interest rates now look to be on hold again into mid 2015, after the wage growth data last week. Also as you say, with the more autumnal feel about the weather over the past week,the winter season is starting to kick in. All positives for the clothes retailers such as FCCN. I note White Stuff, the fashion retailer has just reported a near doubling of profits to £9.47m on a turnover of £115m with its 94 stores in the UK and a small number of stores in Northern Europe, wholesaling and franchises in a German department store chain. Again in the US, after a difficult start to the year with exceptionally cold winter and spring weather, retailers are starting to see growth pick up, as seen in some of the results reported last week such as JCP. Continuing low interest rates and falling gas (petrol) prices, are helping to boost confidence and retail spending, although at a more steady pace than in UK and Europe. It is all looking far more positive.
In the short term time frame a small triangle appears to be forming. Triangles are nearly always formed in B waves or the wave 4 position, they are corrective patterns to the current trend. But more importantly the thrust from such a pattern tends to be the final move in the direction of the trend, triangles tend to be the final correction prior to the terminus of a that move. In this case that points to this current consolidation as being wave 4 of 5, so a little more downside to complete this 5 wave decline, and the multi week correction from the May highs. The downside appears to be nearly complete.
Back to the technicals, with the 5th wave extending in the C wave of this correction, there may be a little more downside, although I think it will marginal and may struggle to reach the sub 40 level. FCCN is very oversold and at these levels, if you look at the internals of the wave structure in the shorter term time frame, the fifth wave is almost complete, which will signal the terminus of this move. It is almost a text book example of a deep zig zag in a wave 4 position. A move back through the 4 wave of previous degree at around 53.5, will be a guide that things are turning blue and the downmove has run its course. Best regards
Thanks for the comments, this is just a technical perspective on the share price. Would add that if you look at the volume on many of the down days over the past couple of months it has been very small, indeed almost negligible on some days, often a clear sign that the price action is corrective to the major trend. Also, If a someone has been building a stake then selling it down, then it must have been a fairly modest amount, but agree there will always be profit taking after gains have been made. One further comment, while the US side of the business is clearly important I believe it is only just over 20% of the business, with Europe and the UK accounting for the rest, and they are appear to be doing well and this will produce the bounce back on any positive update in the coming weeks. Best regards
An important low in share price of FCCN may be just around the corner. Firstly this share is extremely oversold on a relative strength basis. Secondly the Elliot Wave pattern is coming to an important junction. Since the low point in August 2012 FCCN appears to have been forming as five wave advance. Wave 3 looks to have been the implusive wave from the January 14 lows at around 33p to the May 14 highs at around 93p. The subsequent sell off although large in terms of time and price is forming a pattern to date that appears to be corrective, and can be labelled as an ABC, forming as a zig zag in the wave 4 position. Please note that the wave 2 in the sequence was a shallow correction in terms of time and price from the Nov 13 highs to low point in Jan 14, thus showing alternation between wave 2 and 4. The current position of the C wave of this decline almost looks complete with a clear five wave decline to the downside as the price approaches the peak of wave 1, although the 5th wave may be trying to extend. It is not unusual for a wave 4 to approach the price territory of the first impulse wave, but they cannot overlap, this is very important. Indeed, often the purpose of such corrective waves is to shake out as many of the weak holders as it can before the next implusive wave can begin. If this count is correct then a move back above the high of wave 3 at around 93p in May 14, would complete a bullish 5 wave advance higher degree.