FNV, Franco Nevada

fnv june 6 2016 from website

This chart comes straight from the company’s website and should therefore be completely free of any bias. Like Royal Gold this is another royalty or streaming company that makes it it’s business to separate the good from the bad in the mining business and then invest only in the good part. They have done very well, but will it continue?

Notice that there is a pretty clear triangle in this chart. These are invariable 4th waves (or Bs) so even though we do not have info from before 2007, we are assuming a completed 5th wave sequence into the top at 350%. Both the apex and the measurement of the mouth of this triangle would allow for further upside to about 400-450%, but the straight line from the top of wave 1 through the top of the b-wave of the triangle, suggest this is the peak.

FNV june 6 2016 bFNV june 6 2016 s

Taking the propaganda out of the charts we move on to Bigcharts and Stockcharts. Clearly the line connecting the tops of waves 1,3 and 5 suggests that we are at a significant top, or at least, could be. Also, if you look at the red arrows you will see that wave 5 has travelled about $5 more than wave 3, but if you were to assume that wave 1 started at , say, $5, you will get a situation where wave 5 travels the same distance as wave 1 and 3 combined. This is a common occurrence. Also wave 5, starting from about $35, can easily be characterized as an expanding diagonal 5th wave. In any event, the last leg up from $50 is quite clearly a contracting diagonal 5th (of 5) wave even if it could be argued that it is not yet complete when looked at on its own. The maximum potential would be in the order of $95 or so but we are satisfied that this will not pan out.

There are warrants on this stock. They show the same diagonal pattern so we would be sellers of this stock.

fnv.wt june 6 2016

By the way, the difference between the 50 and 200 day moving averages on FNV, now at about $13, has never been higher since the great recession and, needless to say, some of the other technicals as the RSI and MACD are also not supporting the recent up move.