 Welcome to the channel. This is reliable Rudy today We're gonna pick up with our A.O. Smith stock analysis with a part 3 video And we're gonna focus more on the charting aspect of A.O. Smith If you don't know how we got these numbers or are not up to date with our analysis currently I have a part 1 and a part 2 so feel free to go back and watch those But picking up from where we left off first I'll say I'm not a licensed financial advisor. Everything in this video contains only my opinion and it's for entertainment purposes only So this was the second analysis discounted cash left we ran for the company in the first video We went over the financial statements second video. We made this projection on where we are interested in buying this stock Now you can see in my history. These are my most recent Analysis of the company now me personally I like to be conservative So I'm going to use my more conservative numbers that I use and I am going to be more interested in this stock price right here Is there anything that we can find in the chart where? We could see a potential drop to this buying area or maybe even down to these low to middle assumptions I don't know. We're going to go into the chart right now This is a o smith. We're on a week chart every one of these little candles right here represents one whole trading week So first thing I'm going to do I'm going to set a trend line Now I can see we have a nice Correlating trend line that I can potentially draw out right here So let's just see if we can get as many points of contact as possible now I like our trend line right There I can see multiple points of contact even this double bottom now I might actually lower that a little bit right around there Because I see this is where we actually do crack this trend line now. Let's zoom into this now Let's not let's not forget on our way up. This is acted as support Now when we crack this trend line you can see we try to get back on top of it It acts as support now when we crack it it's acting as resistance I like the look of that now when we do push that this could be taken as a back test of that trend line So back on top now. We expected the act as support support support And now we haven't come in contact with this trend line since So is it possible that we get back down to this trend line if I see the current price if we were to fall straight to this This is right around 25 To 30 dollars is where our trend lines currently sitting Now I can see looking back at our valuation of the company I'm very interested in the stock price at that range So it would be if we do get a fall to this trend line I'm going to be very interested in potentially starting a position in this company So nonetheless, let's go over the history of the stock. This was a publicly trade stock in 1983 now I can see this first initial drop is not a slouch of a drop by any means Around 63% so let's put a fib tool through that Fib tool I can see full extension right here If I were to pull this over we set a double top right at our full extension. What is this percent fall right there? Let's be let's take a look and let's not forget We see a lower high where this double top comes in I see a one two three four five Wave structure reverting down to the trend line where we set a higher low double bottom get an extended right leg and Look at after we get this extended right leg. Look at this fall right here We come just back test the neckline if I wanted to draw this straight out you would have hit on a nice little swing trade right there been out of that three to one and potentially right back in off the trend line, so Pretty good stuff right there. I would say Definitely some opportunities that took place during this time now from this five wave structure I'm going to take another fib tool and let's see what type of extensions we get right here I can see yeah, we get rejected our first extension now. What is this percent fall now same scenario? I see a one two three four five wave structure now We crack this trend line in this five wave structure, but ultimately we get back on top of it So is this a justified fall from a rejection from our first extension? I think it is so I'm going to actually get rid of this fib tool now I can see if I were to drag this all the ways over We actually do get some sell-off at our full extension so some people did keep this up on their charts But ultimately I would have taken this out and I would have put a new fib tool through this drop right here What is this drop right here? 63% you know it sounds like I keep saying 63% what was this drop? 66% I mean geez but nonetheless, let's put a fib tool through this Now you see we get a full extension. We actually shoot through that extension Look how we hold on top of that full extension now one thing about the fib tool is it is not 100% accurate Maybe something fundamentally changed in the business that brought demand to this stock for us to continue running over top of this Extension simple supply and demand if more people want to buy them so the stock is going to keep going up But at this full extension I if we zoom into this I see we have a left leg We have a neckline built and we have a double bottom extended right leg and look at this wick down right to our neckline Look at the buying pressure that came in right here That's pretty extraordinary if if if I were to say so myself So we're actually going to draw this trade out and see how I probably could have played this if I were Looking at this stock. So if this is where my neckline is at look you get triggered in on the money That is crazy to me now. Here's your risk Now let's see what this reward is So that's about a one to one That's our two to one And that's our three to one look Here's your risk you get a one to one two to one three to one boom sell off on your three to one risk That that's pretty crazy to me now. This stock does continue getting bullish off of this I'm sure there's some sort of trend line in here that people were buying and you know, it's not like this was the year 2020 or 2021 when Uh, the united states printed a bunch of money and this benefited great from stimulus checks No, this happened over the course of 2016 to 2018 But what what if we remember from the last video when we were looking at the revenue the revenue declined in 2018 After it had already run this much Isn't that crazy now. Look at this. I can also see a one two three four five wave structure and What is this percent fall? I'd want to know what this percent fall is if this is 63 i'm going to fall out of my chair Okay, only 50 but still that is a pretty significant fall from an overextended stock So i'm going to completely take out that flip tool i'm going to put a new flip tool in right here Look we put our all-time high price gets rejected off this first extension now You can play around with this however you want You can match that up on the dot if you wanted to right there and then look at this sell-off Let's just let's just cancel out all our lines put a new one in right there Look at that. What is this sell-off? Now let's go back quickly and Redraw our trend line in Right about there roughly Give or take you know, that's a pretty solid trend line. I would say I like having that trend line in right there Now what could potentially transpire with this drop? Now we've seen multiple five-wave structures throughout the history of this stock Let's see what would happen if we potentially got a five-wave structure Is there a way that we can match this up to get down to this trend line? So let's put a fib tool Top of the bottom of the move Now if this is a this is a pretty solid drop right here. What is this drop? Roughly 40 drop that we had right here. So if this is a potential wave one I'm looking for a wave two to retrace. Where could this retrace at? Well, I see a top top top right into my 618 retracement Triple top into my 618 retracement. So if this were to retrace if this is a wave one A wave two into my 618 retracement It's potential that we get a wave three that cracks support now. What is our percent drop here 40 percent? So we're going to go from our 618 retracement And say 40 drop puts me right there. So we're going to lower this line down a little bit And let's draw that back in there for a 40 drop roughly right in there now. What do I have? Let's put a horizontal line right there. Then what do I have built in right here? Let's zoom into where I'll be damn look at that right at a gap fill on this On this day we gap up the next day and this gap never got filled right at the end of my wave three Isn't that a coincidence now? I can also see there's another gap right here and another gap right there So this is going to actually be a potential buying window Right there isn't it crazy how they're all Like the same distance apart from each other. I find that very crazy now. I also see another gap right there So we're going to mark that into our chart So if we do end up getting a potential wave three right here, what am I going to look for after that? I'm going to look for a wave four that backtests the bottom of wave one now from the top of my wave four I'm going to expect a wave five to come in now We have a 40 drop a 40 drop now its potential we get a wave five that could be another 40 drop right here Now where is that going to put us? Well, we're through our our gap fill right here Now a 40 drop puts me right about there Now let's put a horizontal line right there right There so that is going to put us For a potential five wave structure isn't it crazy how this is very close to our trend line right there now What else do we have built up at this support at the end of our five wave structure? I can see we have a nice mess of support right here Isn't that crazy and I do see a gap fill at 32 So we're going to mark this gap film We're going to switch it over to a day chart and see if there's anything else that we can find inside of this So yeah, look at that support built up at the end of our potential drop of our five wave structure So I can see there is a gap fill here is a gap fill And we have one last gap fill right there same scenario. Look at these distance apart from each one of these Now if we do get a wave five right here, I would expect buying pressure off of those gaps because we're getting very close to that trend line And let's not forget. I like the valuation of the company right here. Where are those gaps at? We got a gap at 32 3 we got a gap at 32 91 cents and we got a gap at 33 50 Do I like the stock the value of the stock in that range? Yes, that is right in between my low and middle assumptions I'm going to be very interested in potentially building a position over the course of that time Now even if I go to my other assumptions right here Let it load Those prices are below all of my low assumptions Do I think it's possible for the company to put those numbers up over the next 10 years? Yes, I do I'm going to be very interested in the stock if we get price action like that so That is going to complete my charting analysis for the company Uh, yeah, like I said very interested in the stock if we do get a type of structure down here I could potentially think about starting a position in these 40s where we had these lines drawn out Um, do I like the value of the company there? Yeah, that's in between my low and middle assumptions I like the value of the company right there So yeah, that is my charting analysis to end this video. We are going to quickly go to the holders of the company Now I can see top mutual fund holders vanguard total stock market index fund I am actually a holder of this company without even knowing that is the beauty of vt You own the entire world's economy. I have benefited greatly from this stock without even realizing it So let's say i'm wrong with this entire analysis and we actually do get a full extension So let's take out this fib tool and go back to our original fib tool that we we can see is getting price action We got rejected off our first extension Let's say i'm wrong in this analysis and we get a full extension And I miss out on it. I don't start a position in it I'm still going to benefit from holding this in my vanguard total stock market index fund That is the beauty of vt I'm a holder in this without even knowing and I've benefited greatly from it in this run Now I hope you guys like the video Um, if you guys have any questions or any comments I'm more than welcome to answer or have a discussion on any of this charting analysis But this is going to wrap up the video. I hope you guys liked it and we'll see you on the next video