The usual then, Nov. 28,2016, and now charts;
Less than a month ago we predicted, that is our EW analysis showed, that much of this wave 1 would be washed away. As it turns out November 28 was the exact date of the high and, so far at least, about 24% has been washed out.
That is normally not enough as first waves tend to have pretty large corrections by virtue of the fact that not everybody is totally convinced that a new bull market has started. Again, normally, one should expect a retracement of at least 62% and in the form of an a-b-c. Considering that the RSI and MACD are almost ready to turn, it is most probable that wave a down is not yet complete but close. A 4th and 5th wave would create a clean 5-wave sequence that would constitute wave a down. Then b up, itself retracing, perhaps, as much as 62%. Then c – always a 5-wave sequence – takes the stock down to about $20 or lower.
Now perhaps none of this will actually happen, but at least you have a blueprint to go by that will tell you when you are right or wrong. What particular part you want to play is entirely up to you and would depend on what degree of fine-tuning you are willing to accept or tolerate, as well as what risks you are prepared to take.
As always ask your broker. He will readily agree that here it is an excellent buy because the recent drop is overdone (never mind the preceding rise). China will need more iron ore pellets now that Trump has won and this company’s management is right up there with the best. It is a good time to offset some tax-loss selling with a few gains and there are only a few days left to do that. Last but not least your broker needs money to put food on the table, certainly at this time of the year.