LUN, Lundin Mining Corp. update

lun apr 30 2014lun apr 30 2014 m

Our original take on this stock was that it had traced out a clear B-wave from the lows at the bottom of the great recession. Despite the passage of two whole years – this is what QE does for you – that still seems to be the correct take. Since the lows of late 2012 this zinc and copper miner has moved sideways tracing out an a-b- which would then have to be wave 2 of C down in a multi-year A-B-C down. Here is the c part of wave 2 in more detail;

Lun apr 30 2014 s

This is unequivocally a “diagonal triangle” in EW lingo. In normal English that is a rising wedge. It is a bearish pattern as invariable it is followed by  a drop back to the baseline or more, in this case roughly 50% or so. Given that prospect we would sell. By the way, this wedge is a classic, meeting all the requirements so our confidence is high. The only possible error would be that the wedge is not yet complete and still needs a 4 and 5. Not very likely given the time that has already passed.