Hey @rcman , you got me thinking with your post yesterday. I posted on this thread because the other thread "has been infiltrated".
It hit me around the end of Feb that my original bullish outlook was wrong and that the Iron Ore chart is following a similar trend to Gold. Gold is now looking to retest it's highs again. So this Elliot Wave Analysis is by no means simple and I have to get confirmation from a lot of other indicators to come up with this pattern, however it looks a similar pattern to what Gold is taking.
So here is the weekly chart.
Take away points are.
1. Point W is around 38.2% of the decline from around $US180 to the low in Dec 2015. This is usually a minimum retracement in a bear market correction.
2. I personally believe, that we are headed towards the 50% retreacement (Gold seems to be doing the same thing).
3. Point Y is my target price for Iron Ore. Note the 50% retracement and the Y vs W ratio of 100% are at the same price, $US110/t.
4. Point X, marks the turn around, and I don't think we are there yet. The 61.8% retracement mark is $US55. I reckon around 52 to 55 as the low. My stochastic confirms this and we are not near a cross over yet. I also checked at the daily level chart and we don't have any "bullish divergence" (lower iron ore price and higher RSI and stochastic vales) yet. The bullish divergence usually indicates the low.
5. I'm now not 100% confident on the target of $US110/t, it may get there but a conservative target would be a touch over $US90 as that would be around the high of Point W. It really depends on the bounce up and whether it breaks through the middle line of the channel (this line ends around the 61.8% Y vs W ratio).
Note that I do not use this to trade AGO (and neither should any reader) as AGO share price is not closely tied to the Iron Ore price chart as it was last year.
AGO Price at posting:
2.3¢ Sentiment: Buy Disclosure: Held
