CBA - Commonwealth Bank of Australia

[PennD]

Hi Chris,
Can i ask, what are the pt4, pt66 etc... is this minutes/time.
I like your trading style.. like AB DeVilliers just pushing 1's 2's next thing his on 80 from 70 balls, instead of going the slog
Cheers

 

[Triathlete]

There is a slight probability that CBA could form a Quasi Fractal. Based on Fib projections, F3 bottom could be somewhere in a 73-71 range. This Fractal would be confirmed by EW count so it would have an extremely high probability of a thrust higher from there, I'd say above 100 mark.

The rise above 84 by not making a new bottom would negate an expanding fractal scenario.

Bendigo Bank (BEN) could sport the similar fractal structure. Let's wait and see, could take a few weeks.


View attachment 60266

Hi Rimtas...Just to clarify your chart are you saying that unless we see CBA make a new bottom at the $71-$73 range first then CBA will not continue higher towards the $100 mark? I am using a monthly chart at present and have also found that my strongest levels are $82.65,$101.90,$114.20 if the stock continues higher and a support level around $66.50 if things go pear shape. I was hoping to see a break above $83.92 on a higher low and higher high to confirm the stock was ready to resume an upward movement towards the $102 level? I have the the stock on a LT wave 3 and a sub wave 4 that has retraced 25% but yet to confirm the sub wave 5 has started on the monthly chart.
Your thoughts

 

[rimtas]

Hi,

My last post was about the posibility that the Fractal could form in CBA. Just in case CBA will dive, I would be informed what is happening, and no any suprises whatsoever at this point. The form of the two fractals is the key-if they are similar, then the the pattern has a forecasting value.

At this stage it is early to tell whether the market will go that way. I'd better tell what I see in EW terms.

I do agree that from 2009 CBA advanced in Three waves, just it is not clear about how we can label the last Top. Is it realy wave (3)? If it is, then where is wave (4)? If you put a (4) label on the last bottom at 73, then it looks too short comparing it with wave (2), which lasted more that year and a half. Just two months correction for wave (4)? I doubt it.
The whole purpose of the corection at this degree is to correct a Bulish sentiment, to force people to throw in the towel, if you know what I mean. To make them feel the same as they felt in 2011-2012. Two months and 13% price drop just can't do this. Also, using EW channelling technique, You can see that it has much more to go (in terms of time) in order to reach the lower line. I can't say that this is impossible, but we must face the fact that only CBA from all major banks sported such a nice and steep wave from 2011 bottom.

Other banks just don't look right for a (3) wave top. More than that, they are in a correction that lasts more than a year, and most likely this correction is in the later stages. This doesn't leave much room for CBA to sport a year long correction from now, if other banks start to rally. So I put an Alternative label- maybe it is just the first wave of (3)?






But let's leave the logic aside and say that wave (4) ended at 73, and 1 wave of (5) is done.
Using Fib relationships were wave (4) subdivides the entire Impulse into 38,2/61,8 ratio, we can predict a Top at ~103,6. But to reach this target price must stay in a Channel, and this means that CBA will climb at least 3 years to reach it. I doesn't make sense... Otherwise it will brake the Channel upwards, adding more evidence that the upcoming advance is not the wave (5).



It is hard to trade CBA at this stage, (unless buy and hold). It would look better if it could have more sideways movement, at least a Fractal that I was talking about. I personally see a better setups in other banks. If you enter it now, the stop distance is too great... Then it is probably better to wait until it takes out ATH and use this breakout as an entry, but this is not for me, the degree of the breakout is too big... I'd rather prefer to pick up bottoms...

Cheers,

 

[Triathlete]

Hi,

My last post was about the posibility that the Fractal could form in CBA. Just in case CBA will dive, I would be informed what is happening, and no any suprises whatsoever at this point. The form of the two fractals is the key-if they are similar, then the the pattern has a forecasting value.

At this stage it is early to tell whether the market will go that way. I'd better tell what I see in EW terms.

I do agree that from 2009 CBA advanced in Three waves, just it is not clear about how we can label the last Top. Is it realy wave (3)? If it is, then where is wave (4)? If you put a (4) label on the last bottom at 73, then it looks too short comparing it with wave (2), which lasted more that year and a half. Just two months correction for wave (4)? I doubt it.
The whole purpose of the corection at this degree is to correct a Bulish sentiment, to force people to throw in the towel, if you know what I mean. To make them feel the same as they felt in 2011-2012. Two months and 13% price drop just can't do this. Also, using EW channelling technique, You can see that it has much more to go (in terms of time) in order to reach the lower line. I can't say that this is impossible, but we must face the fact that only CBA from all major banks sported such a nice and steep wave from 2011 bottom.

Other banks just don't look right for a (3) wave top. More than that, they are in a correction that lasts more than a year, and most likely this correction is in the later stages. This doesn't leave much room for CBA to sport a year long correction from now, if other banks start to rally. So I put an Alternative label- maybe it is just the first wave of (3)?


View attachment 60443



But let's leave the logic aside and say that wave (4) ended at 73, and 1 wave of (5) is done.
Using Fib relationships were wave (4) subdivides the entire Impulse into 38,2/61,8 ratio, we can predict a Top at ~103,6. But to reach this target price must stay in a Channel, and this means that CBA will climb at least 3 years to reach it. I doesn't make sense... Otherwise it will brake the Channel upwards, adding more evidence that the upcoming advance is not the wave (5).



It is hard to trade CBA at this stage, (unless buy and hold). It would look better if it could have more sideways movement, at least a Fractal that I was talking about. I personally see a better setups in other banks. If you enter it now, the stop distance is too great... Then it is probably better to wait until it takes out ATH and use this breakout as an entry, but this is not for me, the degree of the breakout is too big... I'd rather prefer to pick up bottoms...

Cheers,

Hi,
Thanks for that assessment.I tend to agree I also do not believe that the SW3 is complete and that the SW4 which I have marked is only a possibility and agree is too short at this stage.Where I am confused is when I take a look at the weekly chart in relation to this SW 4 it shows that it has broken up into 3 waves of lesser degree and within the % ranges that a wave 4 usually divides into?
I also like your Alternative of it still being a wave 1 of a LT wave 3 now that would be something,I like your thinking!!!
Cheers!

 

[piggybank]

ATH reached today after breaking the resistance of around the $83.70 mark.

 

[financialreports]

Although CBA offers an attractive return of approximately 6% per annum, the share price is quite high and it would take a quite a few years to justify the discrepancy between book value and price currently. Whether it is a good investment would depend on the opportunity cost for the individual.

 

[Toyota Lexcen]

What is "opportunity cost"?

 

[Triathlete]

What is "opportunity cost"?

Opportunity cost is the cost of a foregone alternative. If you chose one alternative over another, then the cost of choosing that alternative is an opportunity cost. Opportunity cost is the benefits you lose by choosing one alternative over another one. The opportunity cost of choosing one investment over another one.

The term opportunity cost is often used in finance and economics when trying to choose one investment, either financial or capital, over another. It is a measure of any economic choice as compared to the next best one.

Example:

There is an opportunity cost over choosing an investment in bonds over an investment in stocks.

 

[Julia]

Another example in addition to Triathlete's explanation would be sitting in a non-performing stock for a sustained period while you could have had that money in another stock which is making good gains.

 

[Toyota Lexcen]

Thanks, you would have to be a very good investor/stock or asset picker to avoid that then i reckon

 

[notting]

Biggest one day drop in 6 years
WOW!!
Beautiful.
It's the greatest stock in our market.
I hate this stock.
As a shorter it's natural.
Bond markets are selling off and so the yield obsession is now a value trap.

Lets' see Greece default, the US stay looking weak and the game is back on!!!!!!!!!

 

[Triathlete]

Looks like getting out at $93.90 does not look like a bad move now going on todays drop in price.

We might get a buying opportunity to trade the stock as per the previous analysis post 502 on 24/11/2014.
Currently we are at a previous support level and it will be interesting to see if CBA will hold here or goes as far as the next strong support at $66.50 all based on the monthly chart above.
Interesting times ahead...!!!!

 

[Muschu]

Biggest one day drop in 6 years
WOW!!
Beautiful.
It's the greatest stock in our market.
I hate this stock.
As a shorter it's natural.
Bond markets are selling off and so the yield obsession is now a value trap.

Lets' see Greece default, the US stay looking weak and the game is back on!!!!!!!!!

And let's watch as the world collapses [we wouldn't hope for this would we?] and forget the profits that CBA has returned to share holders these past 6 years.

 

[Porper]

And let's watch as the world collapses [we wouldn't hope for this would we?] and forget the profits that CBA has returned to share holders these past 6 years.

A big call to be all doom and gloom...both the broader market and CBA. Why would anybody pick one of the strongest stocks on the ASX to short? Plenty of support for CBA in this area too.

 

[Miner]

Another example in addition to Triathlete's explanation would be sitting in a non-performing stock for a sustained period while you could have had that money in another stock which is making good gains.

By any chance could this be Julia's last post on ASF ?

 

[banco]

I do wonder if today's fall in the CBA is going to be looked on as the beginning of something a couple of years from now. Just as what were seen as relatively minor events in the US during the runup to the GFC took on new significance later.

 

[Muschu]

A big call to be all doom and gloom...both the broader market and CBA. Why would anybody pick one of the strongest stocks on the ASX to short? Plenty of support for CBA in this area too.

As a long term holder I am certainly not about to desert CBA.. I might not like "banks" but the returns, as a retiree, have been helpful.

I am troubled by people who appear to almost "want" doom and gloom... And who appear not to understand what this may bring to so many good people...

 

[rimtas]

Currently we are at a previous support level and it will be interesting to see if CBA will hold here or goes as far as the next strong support at $66.50 all based on the monthly chart above.

You reckon this is valid? We discused this possibility earlier, it is still too early to make any conclusion, but if CBA drops in five and breaks 73.55 i'd say it's over. Let's wait and see. If it happens I change my super to cash as they are invested heavily in CBA and other big 3

 

[rimtas]

Another way of interpreting things is that only wave (3) has toped out, this scenario says that a year or so will give no net progress, but CBA should not make 5 wave decline in the upcoming weeks. ANZ wave structure supports this scenario better as well. For a bigger top everything pretty much should be aligned for a crash, but now market is still fractured.

 

[Triathlete]

You reckon this is valid? We discused this possibility earlier, it is still too early to make any conclusion, but if CBA drops in five and breaks 73.55 i'd say it's over. Let's wait and see. If it happens I change my super to cash as they are invested heavily in CBA and other big 3

Yes Rimtas I know we have spoken about CBA a while ago and below is a summary of my own analysis on the monthly chart we will see what happens.

I am out of CBA presently and was able to ride the last rise successfully from $ 84 to $94 before getting out, so now will wait to try again when it is right.

Based on my monthly chart price table $66.50 comes out as a possible worst case scenario personally I would be very surprised if it did get to here but would certainly give everyone a good buying opportunity.

There is some slight support around, $76.85 and $78.30 and were it is today is a stronger support level at $82.67 so it will need to break all these levels first.

It is a must to hold $82.65 here otherwise it will move lower to the other levels based on my price analysis and worst case $66.50.

Interesting times!!!.