We had an $87 target well before it got there and are now looking for $62.50 as a minimum. See previous posts for a better look at the triangle that underlies this prediction. The stock has now fallen to $76, about $11 or nearly 13 % below it’s recent peak. The RSI and MACD both suggest a little rebound soon but this downward climb is not over.
Individual gold stocks have not always followed the same path, ABX and G are down but FN was, until recently still up, so we will use the XAU. As per the June blog we targeted the XAU to go to about 60 (it was at 104 at the time). There is at this point no reason to change that outlook. The triangle on which this prediction is based is pretty clear. Having said that it is also fairly clear that this sector as a whole has been crushed and it stands to reason that, using the hopelessly incorrect Keynesian view of economics, gold stocks should do well as other stocks sink. So there may be individual gold stocks that are approaching a good buy level, but generally this is not yet the case. Here is the big picture once again;
At a level slightly above 60 this index will start making a new low, which is to be expected if it is a C wave. Also the triangle measurement will be reached and time wise the upcoming low may occur right under the apex. We will stay with 60.
Obviously gold stocks are cheaper than then were at any time in the past 10 years but they are also more expensive than ever in the 1000 years before 2004.
After almost six years of rising constantly, we prognosticated, a month ago, that this stock would fall. 4 days later it peaked marginally higher and then lost almost $4 or 11% in a week. Then as now we are not absolutely sure of the exact count. Judging by this detailed chart, which shows the 5th wave we think, it is possible that the entire rise is complete and we will have a large drop with this only the beginning (in blue). Alternatively this 5th wave may not be complete and we are presently in a 4th of 5 and probable tracing out what will become a triangle (in grey). This latter possibility suggests a top in the vicinity of $39 or so. As decisiveness is, and bravery is not, a good character trait in the investment business we would sell here again if we had not already done so on Sept. 4
We show this stock solely for it’s didactic value. This ( iron ore pellet ) company has had a pretty wild ride but in EW terms it is simple a “flat”. The B wave is crystal clear. Wave C should become a 5-wave affair. If the count shown is correct we do not know as it is entirely possible that we are just about to finish wave 3, not the entire thing. In the big picture it is hardly relevant.