In our 2011 blog we explained how this stock would decline either in an A-B-C zig-zag or a simple 5-wave sequence, all depending on where the actual top was. Most probable it was in 2007 so this C wave had to become a 5-wave sequence (see also Vale and WLT). We have that and we have participated in the first up leg, good for about a 100% return if sold close to $11. In this chart you can see why that $11 level was important. It is the upper trend line of the channel that has been operative for the better part of the last six years. The stock simple cannot break out on the first run.
If we are correct in our overall assessment than one should expect a retracement of about 38% at the very least, of course if we are in a new bull market we should go to new highs but that might be a lifetime away. 38% of about $60 is $22 and if we take $4 as the starting point that gets us to $26. So really we should own this stock, but not if we can get it cheaper than it is today. We think chances are good that you can get this for $7.50, see below;
If you can get the stock at say $7.50 or lower, your return will improve dramatically, after all the “buy low” part of “buy low and sell high” is half of the equation. If this analysis is correct “break out” should soon follow after which a double is again a reasonable expectation as W1 up appears to be a 5 wave sequence and should then be followed by another. In the worst case it could become an a-b-c correction but should still lead to a double, give or take.
By the way, gold stocks are trading in the same way as TCK.B. They probable, recently, completed their first leg up (see ABX) and are now correcting in a wave 2. Gold itself idem ditto except it may have a lot further down to go ultimately.