ELLIOTT WAVE

A Call To Verizon

10/05/06 10:44:22 AM

by Koos van der Merwe

So... is the stock a buy?

Security: VZ
Position: Accumulate

If you've never heard of Verizon (VZ), you must avoid looking at advertisements. Is the stock a buy? I think so... but not just yet. Let's look at Figure 1.

FIGURE 1: VERIZON, DAILY. VZ looks promising, but first, the RSI must be oversold.

Graphic provided by: AdvancedGET.

Figure 1, the daily chart of VZ, shows a wave count suggesting there is a 74% probability Verizon is tracing the b-wave in an ABC–fourth-wave correction to possibly test the $35.44 or $34.64 level.

Advanced GET is also suggesting this may not be a completed wave 3 and indicates a probable higher target of $40.89. Whatever the eventual wave count, the standard relative strength index (RSI) is looking for a correction and may test the lower trendline rather than either of the two targets suggested. Chances are when it does so, the program may recalculate its suggestive wave count.

In the chart, I have also shown a JM internal band (light blue lines). The JM internal band is a very conservative strategy based on two 15-period moving averages offset by, in this instance, 2%. A move above the upper band suggests a buy signal, and below the lower band, a sell signal. Normal stop-losses should be used to your preference. At the moment, VZ is still in a buy mode, and long-term investors would add to their position on the correction rather than sell outright.

Verizon is a share on my watch list, and I shall buy it once the RSI is oversold, possibly at the $34–35 level.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address:	3256 West 24th Ave
	Vancouver, BC
Phone # for sales:	6042634214
E-mail address:	petroosp@gmail.com

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ELLIOTT WAVE

A Call To Verizon

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