R, Romarco update

R l nov 2011R s nov 2011

Sometimes things just do not do what you expect. Romarco is a good example. I did not expect it to trade much  below about $1.50 (see previous blog) and here we are at around 94 cents having been even lower.

With the benefit of hindsight I now assume that the stock did not do a simple wave 2 correction as a-b-c, but did a triple a-b-c, that is a structure that follows the basic  a-b-c X a-b-c Y a-b-c pattern. You never get more than three so if this assumption is correct you cannot go much lower. Furthermore the stock has lost 2/3 of its value, roughly, which just happens to be a nice Fibo ratio.

The company recently added almost 95 mln. to it’s cash reserves and at the present low burn rate could continue operations for many years to come. The waiting is on environmental report by the US Corps of Engineers which should take slightly less than another year. After that things should become very profitable and there is no political risk as this mine operates in NC, USA. Management is also good looking which is seldom the case with miners.