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ELLIOTT WAVE


Kepple Corp. A Keeper?

09/20/11 10:13:44 AM
by Koos van der Merwe

Sometimes a stock that is barely known because its price is too low presents a solid buying opportunity.

Security:   KPELY
Position:   Buy

Kepple Corp. is rarely mentioned by any analysts. Net profit decreased from $4.710 billion in the first half of 2010 to $4.575 billion by the first half of 2011. Net profit, on the other hand, increased from $651 million to $696 million.

FIGURE 1: KEPPLE, WEEKLY
Graphic provided by: AdvancedGET.
 
Figure 1, a weekly chart, shows how the share price moved from a low of $1.28 on November 2001 to a high of $18.90 by October 2007. The price then dropped to a low of $4.50 by December 2008 along with the general market decline. Since then, it has risen to $19.66 by April 2011. The Elliott wave count over this period is suggesting that an ABC correction has been completed, with the relative strength index (RSI) at oversold levels, but have not given a buy signal yet. The ABC correction is within the fourth wave of lesser degree as shown, so there could be an upward correction soon.

FIGURE 2: KEPPLE, DAILY
Graphic provided by: AdvancedGET.
 
The daily chart shown in Figure 2 is suggesting a divergence buy signal shown by the RSI, with the price within the fourth wave of lesser degree. Fibonacci retracement is suggesting a target of $15.84 (38.2%), $16.55 (50%), and $17.25 (61.8%). This level could be a wave 1 of a new bull trend.

With so many bears out there calling for a coming recession, here is another chart suggesting just the opposite. I would be a buyer of Kepple for the long term.




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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