EGO Third Price Target Hit
The EGO (Eldorado Gold) Long-Term Trade idea hit the third profit target (T3) yesterday, as well as today, for a 36% gain from entry. As discussed in the mining sector video posted earlier today, the odds for a pullback in the mining stocks are quite elevated at this time and that holds true for EGO as well.
Not only are reactions off the price target levels typical in general but EGO is also coming off overbought levels (on the daily RSI) not seen since the stock peaked in Sept 2012 as highlighted on the left of this updated daily chart. I don’t expect anything remotely close to the 46% plunge in the stock that immediately followed that previous similar overbought condition, as that one had occurred during the early stages of the recent bear market in the mining sector whereas this time around, the stock is most likely in the early stages of a new bull market.
I’ve also added an very steep uptrend line on which prices current sit precariously on top of. Any solid break or daily close below that trendline would likely spark a correction which could provide another objective entry in the near future. T5 remains the final long-term target at this time but again, the odds of at least a decent correction before EGO gets there is quite elevated at this time. Additional details on this trade, including the longer-term bullish case, can be viewed in the Gold & Silver Trade Ideas video posted on June 13th.