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-c 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;

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.

We have warned at least twice that this stock was a sell at around $9 or so. The actual high was $9.28. This one had two problems going against it. First a pretty well perfect B-wave (this it had in common with three or four dozen other stocks). Secondly it went to the altar twice but did not quite make it, joining the long list of failed take-overs mergers, BCE, X, POT etc.

The stock is now down roughly 65/70% and it does not look complete even if a nice bounce is in the cards. See also today’s copper entry. Both are in a fourth wave.

This is another B-wave, and it had two takeover bids, here are the charts then and now;

The stock dropped right on cue from a peak of $9 to a low of $6.25, or about 30%. It has done a nice 5 waves and is in the process of retracing that which possible could take it back to about $8 (maybe) . Then wave 3 or c will start and take the stock down quite a bit further.

On the left is the expected trajectory for Lundin Mining as of the end of Feb. On the right is what we got to date. The stock, as apparently is “normal” in these bullish times, went right to the maximum of $9+. Then it crumbles despite two take-over bids; it should continue lower, perhaps much lower.    Click on the charts to enlarge.