IMG has not, so far at least, shown a clear count. Previously a triangle was a distinct possibility despite wave b looking more like 5 waves than 3. Right now the lower trend-line of the entire structure coincides with the lower trend-line of the triangle itself. Normally that line should be broken briefly so if that does not happen I would assume that the uptrend started from $13 and has completed a 1-2, 1-2
Looking at the XAU a very distinct triangle occurred, see below;
This triangle measures about 60 points which would yield a high of about 230 for the XAU, which is actually not that far above a double top. Further evidence that the gold stocks may go up a little further comes from Kinross , not just the stock but the warrants K.WB;By comparison there is a chart showing what Hecla , HL, did back in 2001.
Goldcorp G actually has the best triangle structure of all of them. Here it is together with the warrants (as mentioned earlier a long time ago, the warrants provide a bigger bang for the buck).It desperately wants to at least double top. (click to enlarge).
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The requirements for a triangle are relatively simple: it should have the a-b-c-d-e (f-g-h) structure, usually each alternate leg is about 61% of either the preceding leg or the one before, wave c is usually the most complex and e can break the trend line but may not trade below the low point of c (however, if it does it may simple mean that the triangle is much bigger than initially thought. Also, even if it is not a triangle, it still is a consolidation pattern with, potentially, more bullish implications as the triangle is invariable an end-game whereas all other patterns can go on a lot further. In fact , the triangle here is the least bullish compared to ,say, a count that views wave b as 1 up, wave c as 2 down and d again as 1 up. This could take the stock much higher than assuming the triangle. See below;
Assuming there IS a triangle, it could still have a larger wave c to become more complex. This would happen if what is shown as e were to travel to $15 or even a little lower. That would not negate the triangle and, in fact , ABX has one that seems to go on forever. The requirement that all legs within the triangle are a-b-c’s seems to be met but for waves b and d it is certainly less obvious that for a and c. So perhaps we are already impulsively on the way up but starting with very small steps like in the chart below.
Then again , if we do have a triangle this may be what is going on;
What argues against this longer triangle is that it does not seem to be in synch with the rest of the market. The best and most “balanced” approach may be to wait for the stock to go through $20 which would suggest the 1-2, 1-2 scenario is operative. There is NO clear bearish possibility right now, given that all down legs are clear 3’s, but that can always change. e already complete is not a very pretty picture!, so unlikely to be correct.
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On Jan 27, a ventured a guess where this stock might go. As you know, I believe that both the bulls and the bears have good arguments, but sofar if the bull argument is correct, why is gold not already at $3000+ ?, after all the financial world almost came to an end etc.etc. So, when I venture a prediction I do so very hesitatingly. Here is the Jan 27 chart;
and where we are now;
The stock did not actually fall to $12, but did reach $13+. From that point it goes nowhere, which is potentially bullish ( remember, do not sell a dull market ). This congestion/consolidation pattern may well be a triangle. If so the stock should drop in wave e, but not below $16 (unless the triangle gets even bigger) . Then there should be an explosive thrust worth about $10. So the game plan should be to buy at ,say , $17. Stop-loss at $16 and wait with odds 10 to 1 in your favour. As the time frame is fairly clear- the top should be reached in 6 months time at the most, options can be used here as well. Similar but slightly different consolidation patterns, some much longer, can be seen in ABX , G and the XAU. Kinross K is a bit of an exception having gone down most of the time. Good luck.
By the way, by clicking on the charts they can be enlarged and then aligned by dragging them.
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Gold stocks may be very risky at this time, especially the smaller ones or the silver types like Hecla HL, this is because the entire up-move from 2001 may actually be a B-wave rather than a new bull market. See below;
Now if you were lucky enough to buy this in 2001 (we recommended Hecla ! ), or at the recent low of $3 obviously you should have sold at about $16 after the triangle thrust. Having failed to do so there there is now a distinct problem that this one is going a lot lower, certainly if we go under $12 and negate the possibility of this A-B-C still morphing into an impulse wave up. My advice. run for the hills.
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