WOW - Woolworths Group

[TPI]

Westpac broker account charts say this below from a technical perspective that supports the case for it being oversold, but I have limited knowledge in this area, and there are other indicators which suggest the opposite:

Stochastics
The Slow Stochastic Oscillator is registering a bearish signal as the %K is below the %D. However, the oscillator has dropped below the critical value of 20 and WOW is now signaling an oversold condition. This means that the recent downside momentum may not be sustainable.

Bollinger Band
WOW is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement.

 

[tech/a]

Westpac broker account charts say this below from a technical perspective that supports the case for it being oversold, but I have limited knowledge in this area, and there are other indicators which suggest the opposite:

Stochastics
The Slow Stochastic Oscillator is registering a bearish signal as the %K is below the %D. However, the oscillator has dropped below the critical value of 20 and WOW is now signaling an oversold condition. This means that the recent downside momentum may not be sustainable.

Bollinger Band
WOW is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement.

A couple of comments.

"The analysts ' is using standard Oscillators for a technical perspective and in isolation.
I would suggest he has absolutely no idea what he's looking at.
All Oscillators are made up of High/Low/Open/Close/Range
Volume/Open interest they are a derivative of price and as such reflect the price action over the period selected for the oscillator.

In EVERY case of an extended down move ALL oscillators will indicate oversold---problem is they STAY THERE!

Bollinger bands are simply displaced Moving Averages and in a free fall will see trading well below.
I've only had a brief look at WOW and cant see anything that suggests a pause yet.

If you would like a considered technical view I'm happy to oblige---but some may see it as

TOO EMOTIVE!!

Read--reactive to popular opinion in the face of clear Fundamental opinion.

 

[Triathlete]

No one ever said they were. You're just arguing for the sake of it now. I'm out.

A couple of comments.

"The analysts ' is using standard Oscillators for a technical perspective and in isolation.
I would suggest he has absolutely no idea what he's looking at.
All Oscillators are made up of High/Low/Open/Close/Range
Volume/Open interest they are a derivative of price and as such reflect the price action over the period selected for the oscillator.

In EVERY case of an extended down move ALL oscillators will indicate oversold---problem is they STAY THERE!

Bollinger bands are simply displaced Moving Averages and in a free fall will see trading well below.
I've only had a brief look at WOW and cant see anything that suggests a pause yet.

If you would like a considered technical view I'm happy to oblige---but some may see it as

TOO EMOTIVE!!

Read--reactive to popular opinion in the face of clear Fundamental opinion.

Hi Tech
I would be interested on your technical view as to where you believe WOW is headed from here.I am still of the view that if price does not hold at $31 then $29 is the next level followed by$26 who know after that?

 

[So_Cynical]

Anyone else visited their nearest Aldi recently care to share their experience?

Visited my Aldi for the first time in maybe 6 months the other day, i always buy these frozen Potato Gratins that they have, anyway i ended up getting bread and minced garlic and some cheese kransky, i had a goos look in the meat and dairy sections and noticed that the range has expanded and had undergone a gourmetification.

Also only took me 3 minutes to reach the checkout.

 

[JTLP]

Hi Tech
I would be interested on your technical view as to where you believe WOW is headed from here.I am still of the view that if price does not hold at $31 then $29 is the next level followed by$26 who know after that?

Agreed - Tech-A would be great to have your input in to this thread.
Rimtas has also provided some really great charting and it would be good to overlay yours for mine and others learning

 

[TPI]

A couple of comments.

"The analysts ' is using standard Oscillators for a technical perspective and in isolation.
I would suggest he has absolutely no idea what he's looking at.
All Oscillators are made up of High/Low/Open/Close/Range
Volume/Open interest they are a derivative of price and as such reflect the price action over the period selected for the oscillator.

In EVERY case of an extended down move ALL oscillators will indicate oversold---problem is they STAY THERE!

Bollinger bands are simply displaced Moving Averages and in a free fall will see trading well below.
I've only had a brief look at WOW and cant see anything that suggests a pause yet.

If you would like a considered technical view I'm happy to oblige---but some may see it as

TOO EMOTIVE!!

Read--reactive to popular opinion in the face of clear Fundamental opinion.

Thanks tech/a, that would be great if you have time to give us your considered view on WOW from a technical perspective.

 

[rimtas]

Bollinger Band
WOW is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement.[/I]

All price related indicators are useless if they are not applied within a context of the Wave Principle. Every eliotician knows that third waves produce an effect, when indicators/oscilators are in an oversold condition and stay there until third wave is not over. In other words, they stop producing buy/sell signals, as they did in first/second wave, or fourth/fifth.
So basicaly if you folow some indicators and noticed that they entered an oversold stage and market did not rebounded, this means that third wave is in progress. At this point one can start changing a time frame of observation-lets'say from hourly, switch to 4H, and then to Daily-in every case indicators will reach an oversold case, and depending on the degree of the wave in progress, an oversold condition starts to diverge at the end of third wave.

Usually the bottom of the oversold indicator is at the point of recognition area and lower(in the midle of third wave), this means that the wave already traveled half of its way, and if you buy not knowing this, loses will folow.

In case of Bollinger Bands- during a Third wave price is trading above/below(depending on a trend up/down)Bolinger Bands and this indicator also fails to produce a signal for entry/exit.
So in sumarry-every single indicator that is calculated using price/time factors is failing in a third wave and not behaving as everyone expects. They just stay low(in downtrend).


I am not sure how to label a waves on WOW in a Daily chart, but this recent move is definately the third wave, so WOW is already half way to the bottom and indicators from here start to diverge and not breach lower levels. This will be only true if the scenario that we are tracking is correct, e.a this is the final wave of an 3-3-5 fllat, and Wave C which should cosists of 5 waves down, is in progress.

I labeled two scenarios at the moment, and as the wave structure develops further down, one of them will be eliminated, but I am sure that to pick up the bottom will be quite easy (sometimes next year).

For a short term trade, one bottom (iii circled) is due just days from here.

 

[TPI]

Very interesting post rimtas, thanks. The terminology is all new to me, but something to add to the reading list at some stage.

MTS also got slammed today with the share price plunging more than 15%, perhaps this is where Aldi starts to take them down and eat away at their market share?

https://www.fool.com.au/2014/12/01/...15-as-dividend-payout-plunges-should-you-buy/

 

[rimtas]

I'll try to determine the bottom of wave iii(circled) by using channelling technique and Fibonacci ratios.

As the wave count and an Indicator(RSI) at the bottom of the chart suggests, the drop from 32.08 is weaker than previous impulse wave, meaning a final wave (v) is in progress. Fifth waves are terminating waves and after they find the bottom, rally will follow.

If wave (v) would be equal to wave (i) with a 7,81% drop from a corrective top, then the bottom should be at +/- $29,4.

Usually wave (iv) subdivide entire Impulse into Fibonacci section 61,8/38,2 and adding this technique the bottom would be at $29,69.

A Descending lower Impulse Channel line is at $29,4 tomorrow, so basically to reach it, market must gap down on open and reverse instantly to the upside. Sideways trading would extend a small wave iv(of (v)) and a Channel line would be closer to $29.
Price doesn't need to touch this trendline, it can fall short from it, but keeping in mind that this is a third (circled) wave of the larger degree, it probably will, as third waves are strongest ones in a sequence. I will be no surprised if it overshoot to the downside.


So in summary the best looking target area for wave (v) is in $29,4-$29,7 brackets this week. A confirmation of the bottom would be a small five wave rally in a 5min timeframe, that's were the buying opportunity for risk takers exists.
The rally that should follow will carry prices back to the wave (iv) area of $31-$32 and this could take months.

 

[Triathlete]

I'll try to determine the bottom of wave iii(circled) by using channelling technique and Fibonacci ratios.

As the wave count and an Indicator(RSI) at the bottom of the chart suggests, the drop from 32.08 is weaker than previous impulse wave, meaning a final wave (v) is in progress. Fifth waves are terminating waves and after they find the bottom, rally will follow.

If wave (v) would be equal to wave (i) with a 7,81% drop from a corrective top, then the bottom should be at +/- $29,4.

Usually wave (iv) subdivide entire Impulse into Fibonacci section 61,8/38,2 and adding this technique the bottom would be at $29,69.

A Descending lower Impulse Channel line is at $29,4 tomorrow, so basically to reach it, market must gap down on open and reverse instantly to the upside. Sideways trading would extend a small wave iv(of (v)) and a Channel line would be closer to $29.
Price doesn't need to touch this trendline, it can fall short from it, but keeping in mind that this is a third (circled) wave of the larger degree, it probably will, as third waves are strongest ones in a sequence. I will be no surprised if it overshoot to the downside.


So in summary the best looking target area for wave (v) is in $29,4-$29,7 brackets this week. A confirmation of the bottom would be a small five wave rally in a 5min timeframe, that's were the buying opportunity for risk takers exists.
The rally that should follow will carry prices back to the wave (iv) area of $31-$32 and this could take months.



View attachment 60569

Thanks Rimtas for taking the time to give us your technical view on WOW,I always look forward to them.One question I have if everything goes to plan as you mentioned in your comments and we get the rally back towards the $31-$32 price range for wave 4 do you have an early view as to where price could go when it finally begins its wave 5 down or is it too early at this stage as we do not know the wave structure?

 

[rimtas]

I usually try to determine targets only when the structure looks closer to completion. Today WOW rallied in 5 waves up from the bottom( means more to go later), but my targets mentioned were not reached. Moreover, wave (v) looks too short to say that it is over, but it can be. Maybe it will move in "threes" and sport an Ending Diagonal for wave (v) if it is not yet complete, who knows.
Or maybe it is just the first wave of (v) and todays rally was part of wave ii. I'll better not guess short term moves, because I do not trade within tame frames mentioned.

To answer your question there is one method to determine aprox bottom of five wave move when the point of recognition is behind us. Simply use this area as the middle of the wave and you can see that the theoretical bottom could be at ~$27. There is even a runaway gap in mid 2012 at $27.15 that could attract prices to close it.

But in reality this method can't be used, unless you want to put your buy order now because let's say you go to Himalayas and won't be able to monitor the situation next six months and miss out the bottom. Waves can be extended, truncated, or in an ending diagonal formation, so there is no true way to say where and when the bottom would be until it is in and a five wave rally on a Daily time frame starts.

But I am keen to buy this stock and keeping a close eye on it. Usually I buy in two/three stages when I smell a bottom is nearby.

 

[tech/a]

Sorry about the delay been pretty busy.

Click to Expand

This is a WEEKLY CHART

 

[kid hustlr]

tech do you make anything of the recent high volume bars?

 

[Triathlete]

Thanks Rimtas for your further views on WOW.

Thanks Tech/A for giving us your view as well and posting your chart. Much appreciated.

I am sure we will all learn something so it will be good to see what happens now with WOW.

Thanks again.

 

[TPI]

Thanks tech/a and rimtas for the charts, interesting stuff.

 

[McCoy Pauley]

According to an article from The Age, Merrill Lynch predicts that the profit of WOW in FY16 and FY17 will fall.

http://www.theage.com.au/business/r...years-says-merrill-lynch-20141204-11zsrz.html

WOW has initiated talks with Pie Face over selling Pie Face pies in WOW stores.

http://www.theage.com.au/business/retail/woolworths-throws-pie-face-a-lifeline-20141203-11zgpj.html

 

[Triathlete]

There is nothing emotional about simply following price action: staying on a rising trend and exiting when it reverses.

You are absolutely right there Julia!!

A good example was Forge group before it was liquidated.Some of the top fundamental newsletters going around that have been in business for over 40 years were all giving this company the thumbs up as a buy and many fundamental only investors were caught out big time when the charts clearly showed it was time to exit.A technical investor would have ridden the trend up and then exited near the top of the trend with a significant profit.Many were still piling into the stock when it collapsed a few months latter.
I will still invest in sound fundamentals but the technicals need to be on my side as well before I place my cash on the line!!

 

[nulla nulla]

tech do you make anything of the recent high volume bars?

In my humble opinion there appears to be a lot of accumulation happening in WOW at the moment even though they have had a few broker downgrades.

Their announcement in respect of liquor distribution in China appears to have been well received by the market. I imagine them rolling out the equivalent of a Dan Murphys in China would be very promising.

 

[Triathlete]

There is nothing emotional about simply following price action: staying on a rising trend and exiting when it reverses.

In my humble opinion there appears to be a lot of accumulation happening in WOW at the moment even though they have had a few broker downgrades.

Their announcement in respect of liquor distribution in China appears to have been well received by the market. I imagine them rolling out the equivalent of a Dan Murphys in China would be very promising.

Is it accumulation or is it still a distribution phase.?
Could the fund managers be slowly getting out around this price to protect there profits at this $31 level in small orders as not to alert the majority as to what is going on?
If that is the case it may take a few months in which case price will then move lower to complete the EW 5 as has been shown by both Ritmas and Tech/ A charts.At what price level only time will tell..At which point we will see them all pile back in
Just my own view!!

 

[Wysiwyg]

WOW Chart price analysis

Hey there Tri. I'm not Elliot Wave or Fibonacci orientated so I don't want to go down that chart path. However I have run a test on WOW and a index of stocks using an exit of 10% but the exit is from any Highest High Price. Since you noted that 10% pullback would be an exit from this years peak. You also would buy WOW in an uptrend so that could be a new high price being made (historical reference high ??). The results were in line with trend following strategies. WOW is a good example of a long term up trending stock.