Here is another update on Osisko. Originally we suggested buying this at $6.25. Then we identified the drop from $9 to $7, which erased most of the gains as a b-wave. We do that in order to start off with a minimum expectation. Now our take on this is that it was a wave 2 implying that we are presently in a wave 3 to the upside.

Given that we had had overlap between waves 4 and 2, this has to be a “diagonal” triangle. A misnomer if there ever was one, read expanding/contracting wedge. They occur only as 5th, as an ending diagonal, or C waves. Given that this is definitely not a 5th it has to be a C, implying that there must be an A and B in front of it which is indeed the case. As these patterns occur when things have gone too far and too fast, the almost always retrace the entire move. The risk then is that the diagonal is not yet complete, shown as an alternative. The problem with that count is that the proportions become ridiculous so the chances of that being correct are miniscule. That is also the case with other possible alternatives. So stay with it but use a stop just under $7, just in case.

Back on May the 12th. a Friday, we wrote that this stock should be bought on a lower opening the next Monday. That day it traded as low as $6.25. It did not break the $6 level that, according on the count, it could not do (see the blog). Here is the chart today;

The stock shot up to $9 and then dropped back most of that. An a and b in our opinion. Now we should get the c, or, alternatively, the 5th leg down was not yet complete but still it should not go below $6. If the ABC, with C  as a diagonal is correct, this one could retrace the entire C wave bringing the stock back to $16. Both the RSI and MACD are in up mode.

Gold miners from Quebec, started production a year ago, trading at a meaningless p/e of 148, cost per ounce about $858 and dropping and the mill just burnt down. Produce about 400,000 ounces once they get going. Here are the charts;

If this is the correct count, and it may well not be, wave 4 is unfolding as an A-B-C in which the C is a wedge. It is almost done, probable. At $6 the stock would have lost 62% of its entire value at the peak and has already lost 62% of wave 3. At about $6 overlap occurs and then the count would be wrong, ergo assuming the count is correct then the stock should not trade below that level. The recent move “smells” like an event driven situation, the event being the fire at the mill. These things are often exaggerated as is implied in this particular pattern. A sharp rebound should then follow. An initial target would be $13. A lower opening on Monday, if there is one, should be bought. Use a stop immediately below $6. No guarantees!!!! This stock trades in Frankfurt as well under the ticker EWX.