See previous blogs, we got this one nailed perfectly from the $42 high to the $10 low (at which time we did not bother to look). The big picture shows how these structures should develop, they are not always perfect and indeed this one could have gone a little lower. In any event a 5 wave wave C appears to be complete at the Oct. low around $10,. We had the breakout and the stock is just rocketing up with one or two gaps. It is up 70% in four months and looks a bit overbought at this point but the first target is still a lot higher at $22.50 wave 4 of prev. degr. We do not know if a wave 2 to about $13.5 comes first.
Just two weeks ago we suggested that this stock was a buy at $15, even if the count was incorrect as in that event the downside was still limited to, perhaps $13, an insignificant difference considering the minimum expectation for a rebound to $20 under both scenarios. We are up almost 30% and would expect this stock to go further to $25 and perhaps higher. Here is the chart;
On closer inspection the objection to one count was that there was no alternation but there actually is ; wave 2 is an irregular flat and 4 a normal flat. The only remaining question is whether or not the drop from $40 to $15 was the entire move, and therefore we would be in a bull market, or just waves 1,2 and 3 with 4 and 5 still to go. If you want to play it safe, take the $5, if you are a little more entrepreneurial go for the $25 target (see also previous blogs). By the way, IMG, IAMGold is possible in the exact same position.
EW seldom provides an unambiguous answer, there are always little things that do not fit perfectly. PAA is a good example. A case can be made that the stock hit a major low yesterday. But the notoriously imprecise long-term chart still leaves a little leeway to the downside. The short term chart allows for two different counts depending on which top was the real top. If the first one is chosen (in black) this should be it. The RSI, MACD and the 62% retracement support that scenario. The fact that waves 2 and 4 do not alternate is the only fly in the ointment but it does not categorically negate the count! When all is said and done, the difference is only about$2 at the most. The first (lowest) target for a rebound is about $20 and the most probable target is $25. Given that the stock is down almost $30 these targets are not unrealistic or overly optimistic. Take your pick.
PS. Previous blogs sketch the path this stock would take quite some time ago and, if I may say so on behalf of EW, with uncanny precision. Just plug/search the index for PAA.