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Goldcorp Seems Ready to Shine Even Brighter

Gold has been in a bear market for over five years now. The yellow metal reached an all time high of $1921 back in 2011, but lost over 45% of its value by the end of 2015. So, it is no surprise that Goldcorp Inc. – the world’s fourth largest gold producer as of 2014 – is having a rough time in recent years, too. As a result, shares have dropped from as high as $56.31 in September 2011 to as low as $9.46 a year ago. The stock is currently trading above $14.20 and investors are probably wondering if the crash is over. Let’s see what the Elliott Wave Principle has to say about Goldcorp’s long-term perspective.
The monthly log chart above shows Goldcorp’s uptrend since 1982. In split-adjusted prices, the stock began its journey to the north from 17 cents a share 35 years ago. As visible, the company’s uptrend has not formed a five-wave impulse yet, since its wave V up is missing, but we can see a couple of reasons to believe it is going to. First, the decline since 2011 has already entered the support area of two previous fourth waves – (4) of III and 4 of (3) of III. And second, trends tend to develop between the parallel lines of a channel and, as you can see, wave IV seems to have bounced up from the lower line of the channel. On top of that, Goldcorp’s relatively low price make it look like a good long-term bet with an extremely favorable risk/reward ratio, because wave V could be expected to exceed the top of wave III. From an Elliott Wave point of view, investors should stay calm and wait for Goldcorp to reach $60 a share.

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