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ELLIOTT WAVE


MacDonald, Dettwiler & Associates Ltd.

07/12/13 03:43:11 PM
by Koos van der Merwe

Investing in Canadian stocks can provide an advantage, and when a stock signals a buy signal, it's worth looking at.

Security:   MDA-T
Position:   Buy

MacDonald, Dettwiler & Associates Ltd. provides ground-based and space-based information solutions that support the operational needs of government -- military and civilian -- and commercial customers worldwide. The company operates in two segments: communications, where it manufactures and integrates satellites; and surveillance & intelligence. When it gives me a buy signal in a market that is recovering from a correction, I take a serious look at it.

Figure 1. Daily chart showing BUY signal.
Graphic provided by: Omnitrader.
 
The daily chart in Figure 1 shows the buy signal given by the vote line. The final signal given is a combination of the strategies shown in green below the vote line. Eyeballing past buy & sell signals given by the vote line shows that by following their signals, the result would have been profitable. Note also that the pattern shown appears to be a flat pattern (see Figure 2). The RSI (relative strength index) shown is in a positive trend, but the TDI (trend detection index) looks negative.

Figure 2. Daily Chart showing Elliott Wave Count
Graphic provided by: AdvancedGET.
 
The chart in Figure 2 is an Elliott wave count of the share. It suggests that the flag pattern shown is a WAVE 4 correction. The flag pattern is suggesting that should the price break out at $71.95, the target is $93.60 (75.21-47.31=27.90+65.70=93.60). Note the RSI, which is in buy mode. Note the JM internal band buy & sell signal. A JM internal band is a 15-period simple moving average offset by 2% positive and 2% negative.


Figure 3. Monthly Chart showing Elliott Wave count
Graphic provided by: AdvancedGET.
 
The monthly chart in Figure 3 shows an Elliott wave count that suggests the price could be moving into a wave 5 of WAVE 3 of WAVE III. This is a bullish pattern. The RSI indicator is still bullish.

I would be a buyer of McDonald, Dettwiler & Associates shares at the present price for a long-term hold.




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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