10 cents away from our $4.75 “guesstimate of a week ago. Again, the target should be around $10 so you can be a perfectionist and wait a little longer and maybe miss the boat all together, or a non-believer and pass up this opportunity. Apparently, Rio Tinto and Mongolia are arguing about the next $5 bln. tranche in the project but it will go through one way or the other.
This has been a sell now for almost a year. All it has done is go sideways in some pattern that again looks like a triangle. This is possible if wave 3 extended and the earlier triangle was wave 4 of 3, not wave 4 of the entire sequence. If this is indeed the case the stock could target about $57. We do not believe it. Use a tight stop at about $42 if long.
Then – June 5th 2013 – and now charts;
So the stock stopped dropping pretty well at the $22 level and has now shot up. The best guess is that , as a minimum, we are doing an a-b-c counter-trend correction. The burst up is most of wave 3 so a 4 and 5 should still be forthcoming. $37/38 would close a small gap left behind on the way down, and that might be the target for the c-wave to end this pattern. At a P/E of 141.7X we would prefer to exit sooner rather than later, say at $35. The RSI is already through the roof.
Again the usual then – Dec. 21, 2012 – and now pictures;
Yes we got this one badly wrong thinking the B-wave was done mid 2011 at about $44. Instead our friends at the Fed. and the plunge-protection-team, managed to extend the whole process by a full two years and another $8 ($52-$44). The interesting moral of this story is that despite being dead wrong it is nevertheless often possible to have a better result by actively trying. In this example (see previous blogs) we have a sell at $44, a buy at $31 and again a sell at $38. That equates to a gain of $20 over a year and a bit. Had you held the position from b onward you would now have a gain of $8 over a period of two years. Being active would have given a return roughly twice as good as staying put!
Now that the stock is back at the double top level (twice already!), it is definitely a sell, even if you are only just breaking even from seven years ago.