DRD update

In this post I wrote that DRD was ringing the buying bell @$2.73 and in this one just a few days later I provided more analysis  and I modeled the bottom of the chart to be within the red oval shown (lowest price in the range was $2.47).

The chart went on to actually bottom (at least so far) at $2.39 and has bounced back as high as 2.87 since then. If you are not sure where the E of 4 label came from, refer to the model chart in the first linked post above.  Since E of 4 completed it looks like we have had FOR SURE, blue 1, 2, 3, and 4.  There can be no question about any of those. Look at the perfect EW horizontal triangle in the 4th wave position.

What I am not 100% sure about is whether blue 5 is also done or not.  On the one hand, waves 1 and 3 touched the lower rail of a nicely formed Andrew's Pitchfork template while wave 5 did not break back down through the center line.   It kissed that line and then rebounded like it had received an electric shock. This is quite typical in these cases.  It shows that the stock is reaching the limits of sell-ability.

On the other hand, that 5th wave does not seem long enough and the interior count is not very crisp.  Gap analysis is difficult as there have been gaps smattered throughout.  The biggest gap did occur in what I call red 5 which implies that it might only be red 3 (and thus red 3 is really red 1).  If this is the case then we are currently working on wave 4.

In consideration of all of the above, I would just label the bottom of this wave 3, not wave 5.  However, I have one small problem with that.  The rally in gold caused by the E wave of a 4th wave horizontal triangle is just getting started and is expected to continue on for a few more weeks.  If gold takes this path then, given how far DRD has already moved, how can it avoid bouncing so far up as to completely wipe out any chance of what is labeled blue 5 as only being 3 of 5?  It's because of this that I counted the wave internally the way I did SO FAR.

The wave is too new to say for certain if it is too late to be a 5-3-5 (a-b-c) or not.  However, if the chart goes down much more than the recent low, the dividend will easily top 10%.  I think that investors would jump on that.  I suspect that the bottom could well be in for DRD and that the shares will appreciate to the $3.80 range and then fall back into an inclining double bottom to the $2.60 range as GLD falls down into wave 5.

If this is actually DRD's 4th of 5 playing out then it could also turn into a sideways triangle followed by one more swoon as gold puts in a 5th wave down to about $1k.  If gold puts in that 5th wave down, run do not walk to your jr miner and bet heavy long.