TRQ update and Copper, the stuff

June 24, 2015 Hamilton

The usual, then Feb. 2014, and now charts;

Turquoise Hill Resources – formerly Ivanhoe – had completed a full correction, an A-B-C, with all the requisite subdivisions , in particular a 5th wave wedge in the C leg, which confidently suggested this was a buy. It was. The low was at $3.17 and the high after that at $5.80 and we defined the break-out point at about $4. In short you could have easily made 30+% This massive mine is now owned by Rio Tinto (51%) and represents a significant part of the Mongolian economy. A collaborative approach to operating this asset is now in everybody’s interest. Consequently more upside is in the cards. In EW terms $10, the base of the wedge or wave 4 of C, is a reasonable goal.

Copper itself may not fare quite as well. It has not returned to the lows of 2008/9, not even close as this long-term chart clearly shows;

or in more detail;

Starting with the top chart, this is from the LME where they do things in pounds per ton, it is obvious that we are still well above the yellow 50+ year channel. So, if we were ever to regress to the mean, there is still serious downside potential, perhaps towards $2 or even $1.50 a pound. EW targets would be even lower than that, more like $1.25.

If nothing else, the long-term chart of copper shows how extraordinary this, give or take, ten year period from 2004 to the present has actually been. Linear extrapolation no longer has any predictive value.

BAA, Banro update

June 23, 2015June 23, 2015 Hamilton

Banro looks just like the others, VALE, BTU, WLT and so on, however if you change the scale to semi-log you get a much better, and in this case, positive result. Previous blogs are incorrect as I did not go back far enough in time. Here a clear A-B-C emerges which is a completed correction. Typically they go out of business at the low point of C, however if they manage to find their composure, there is a reasonable probability that a new bull has started. This thing went from $17.00 to 13 cents so if you ever liked it you must like it at these levels. From the lows we broke out of the channel and quickly tripled the price, this looks like wave 1. Wave 2 should take back 15 to 20 cents and then wave 3 should start.

VALE and TCK.B

June 22, 2015June 22, 2015 Hamilton

Then, three years ago, and now charts;

We had targeted $8 to $7, with the proviso that it could go lower. The actual low was at $5.45. The count as shown, correct or not, actually developed accordingly. Therefore we would now be buyers of this stock.

Then in this case was Jan. 4 2011 so more than 4 years ago. Now is today July 22, 2015. At the time we tried to keep an open mind with regard to the actual count. We favoured the idea that there was a big, and irregular B wave but we also toyed with the possibility that it was a 5th wave. Today the B wave idea looks far and away to be the better fit. That implies that the C wave down should subdivide into 5 separate waves as shown in the top part of the old chart. We have to struggle to find such a 5-wave subdivision and show only one possibility using an elongated 5th wave wedge. That would target about $10. Also C waves usually make their low below the preceding A wave which would call for a price below $5. In short , unlike with Vale, there is no reason to rush in here.

One of the problems with this company is that it is run with the mindset of an M&A , Mergers and Acquisitions department of a bank with all the financial engineering that goes with it. The real world of mining simple does not play by those rules. Nor does China.

Before you buy anything, have a look at BTU and better yet WLT, Walter Energy a “pure-play” coal minor that went from $140 to 26 cents, see below;

SUNE update

June 21, 2015June 21, 2015 Hamilton

May 10th at $28 and change this one looked well done. Today, 40 days later and about $2 higher it looks even better done. Perhaps, like the mythological figure of Icarus, this one is getting too close to the sun and is about to drop back to Earth. For the record we did suggest buying FSLR in April of 2012, but not this one having never even heard of it. So we missed the proverbial boat and , from here on, would prefer to keep missing it. As with the previous blog there may be a triangle around about $19. This could, if it actually exists be either a B or 4th wave triangle. We prefer the latter, partly because if the former applies the implications are far more bearish. So expect a drop back to at least $12.50. Our usual technical indicators, RSI and MACD are pointing in the same direction. See also CSIQ which we would have shorted, see previous blogs.

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