See also our previous blogs. Last time we were ambivalent about this stock. Now, that is after loosing $300 out of $320, the stock might actually be ripe for a decent , however not without a tight stop. Potentially a bounce could double the value of this stock and given the recent bad news this might just be the right time.
Natural gas just keeps going. In commodity circles this is known as “trend persistent” maybe even a little obstinate. In any event a nice A-B-C down is complete and then some and both the RSI and MACD are heralding the possibility of a change. This is relatively sure bet, if for no other reason that there is only $2 of downside left. To play it one could use the HNU, or GAS ETF’s. The HNU is more sensitive to roll-over risk if the markets stay in contango. Both come from great heights (but prices are adjusted!)
We prefer the Claymore ETF as with a little imagination a count can be put on it. Summer is coming and that is actually the period when most gas is used (air-conditioning), so maybe this is the time. For the record, we have been wrong on this one before!
Fortuna got pretty close to the target of $3.50 (4th wave of prev. deg.), and, not coincidentally a 50+% retracement from the highs of $7.50 or so. It could be a buy here around these levels for a trade as both the RSI and MACD are at 3 year lows. Should the stock at least close the gap it could climb to $5.30 easily. Thereafter we remain disinterested in the precious metals.
Back in December we warned that IVN could fall out of bed a lot more before regaining its composure, the reason was that the rebound from about $13 to $23 was clearly corrective, implying a new low in the future.
Today we are well on our way to making a new low and then some. My best guess is that we are in a third wave of C (or 5) but the picture is by no means clear. The stock is down about 50% from the $23 high and about 60+% from the all time high of $30. From a valuation point of view this stock should be a buy, certainly at around $8 to $3, if it manages to get there. Fundamentally, and I do not follow that, there are all sorts of games being played between the company and Rio Tinto, the Mongolian government, and of course China that is or is not in a “soft landing”. The infrastructure for the mine itself is on schedule and production should begin later this year. There are some concerns with regard to water supplies. Note that the RSI and MACD are already pointing upwards.