I was going through my daily pattern sleuthing, and I found something that made my heart race. An Elliot Wave channel!
We're taking a look at BVN, which I have confirmed, is a Peruvian precious metals mining company. My analysis and trading strategy is detailed in the video below.
I'll start off with a picture, as always, click to enlarge
Elliot Wave theory dictates that every broad market move can be divided in to five waves up, and three waves back. Often, the waves form a channel, which is very useful in forecasting long term movements. This sometimes works for individual stocks, and I have conviction that BVN is "one of those stocks."
BVN is at the bottom of the channel, and the upward Wave V is about to start, which means that a major upswing is on its way.
As icing on the cake, a small triangle formation is forming with short-term price targets at $40 and $50 and is about to break out.
And finally, to make things even better, silver and gold are spewing out buy signals with reckless abandon.
So what is the strategy. Depending on your appetite for risk, you can do one of two things.
1. Buy tomorrow
2. Wait until a definitive buy signal, and place a buy stop order around 45.30
3. Our price targets are at least $55 within the next year, and I expect a move to $65. This is a long term strategy.
4. My only place that I promise to sell as now is when the price hits the top of its Elliot Wave channel.
5. Our stop loss is a break beneath $42, which breaks the channel.
I will be buying BVN stock tomorrow morning, and a leveraged option upon breakout above $45
Happy trading, post any questions in the comment box.
~Christopher Diodato
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