KGHM Polska Miedź S.A. is a multinational corporation which has its headquarters in Lubin, Poland. Traded under tickers $KGH at WSE and $KGHPF in US in form of ADRs, it is a component of the WIG30 index. KGHM has been a major copper and silver producer for more than 50 years. As a matter of fact, it operates 9 underground and open-pit mines located in Poland, USA, Canada and Chile and is actively advancing other projects. KGHM produces key global resources including copper, silver, gold, platinum, nickel and others. Currently, we see indices but also metals like copper and silver resetting one more time. A turn higher along with weak dollar, should be the next big move. As a rule, the rally in prices of metals provides a magnifying effect on the share prices of metals producing companies. Therefore, KGHM being one of major producers should become a profitable invetsment target as it should ramp up along with acceleration in commodities prices.
Previously, we have discussed the stock price of KGHM already twice. First, it has demonstrated an impressive rally since our initial article from August 2020. Then, in the last article from June 2021, we saw a new all-time high predicting a pullback to happen soon. Indeed, the pullback took place. Now, we are close to buying area anticpating a next big rally. This blog provides an update.
KGHM Monthly Elliott Wave Analysis 08.28.2022
The monthly chart below shows the KGHM shares $KGH traded at Warsaw Stock Exchange. First, from the all-time lows, the stock price has developed a cycle higher in wave (I). Hereby, KGHM has printed a top in October 2007 at 145. Since the red wave III of blue wave (I) shows a price separation higher, the cycle up is obviously an impulse. From the highs, a correction lower in wave (II) has unfolded as a zigzag correction being a 5-3-5 structure. It has found an important bottom in October 2008 at 20.10.
From the 2008 lows, another motive cycle has started. KGHM has broken the 2007 highs at 145 in a 5 waves move in the red wave I. Hereby, the share price has printed a high in April 2011 at 200.30. From there, a multi-year correction in wave II has started. Hereby, one can recognize a double three pattern. It has ended in March 2020 with a capitulation move down to 48.01.
From the March 2020 lows at 48.01, KGHM has started a new cycle higher in wave III of (III). Break to the new all-time highs has confirmed that. The target area for the wave III to end is towards 229.05-340.55 and possibly higher. As of right now, first leg up has reached already the minimum expectations. It is the the preferred view that the leg up is the wave ((1)) of III which has ended at 230.80. From the al-time highs, a pullback in wave ((2)) is currently in progress and should find support in 3, 7, 11 swings above March 2020 lows at 48.01 for a new rally towards 230.80 and even higher.
KGHM Daily Elliott Wave Analysis 08.28.2022
The Daily chart below shows in more detail the pullback in wave ((2)) from the all-time highs printed in May 2021. The consolidation pattern is most likely a zigzag pattern. First, impulse in blue wave (A) has found its bottom in November 2021 at 131.50. Then, a bounce in blue wave (B) has set connector in March 2022 at 193.60. From there, wave (C) has been confirmed by breaking 131.50 lows. Diagonal structure in blue wave (C) might be currently in the short term bounce as wave 4. Then, a final move in wave 5 of (C) towards the inflection area should take place.
Investors and traders should be looking to buy KGHM from 94.14-32.41 blue box area. While price holds above 48.01, the decline is black wave ((2)) and the rally will be the black wave ((3)). If 48.01 will break, then KGHM has been correcting the cycle up in black wave ((I)) against the all-time lows in black wave ((II)). In either case, a new cycle towards 230.80 highs and beyond should take place