Haim,
The factor that you mention, that there are many non-believers in the PM stocks, I take to be bullish.
Many of the goldbugs have been wiped out over the last few years and gold sentiment is not very bullish in the general market, to say the least, ggg. Those that bought bottoms in PM stocks just because they were cheap found they became even better bargains later on. All the quick sell offs after the gold price rallys cause further caution for investors. In my opinion this is what is to be expected at a bottom in a bear market. Rallys are sold into as no one believes they will last.
That is of course when they do last!
Sentiment is not enough, but there is a difference in this gold move than the last years moves. I see it more clearly on the tape than charts, but its there also. The fundamentals of the markets have changed and the dynamics of golds relation to them are changing also and that IMHO, is what all the little recent gold rallys are trying to tell us.
The fact that this rally is behaving differently than the ones before and under new fundamentals (falling dollar, interest rate increases, yield curve, faux CPI reports, reduced CB selling, reduced forward selling by producers, economies of gold buyers doing well, faltering Nasdaq, sick cyclicals, etc etc) has me holding some core long term positions in PM stocks. Been awhile since I have done that!
No guarantees, but that is what I think.
Disclosure, my favorite gold stock is AEM, has promising FA to go with the TA possibilities. In oils, go to Strictly Drilling thread, they have a posts of charts of good performers and ask someone for laggards(=late cycle, not bid up yet), I am sure you will get recommendations. Fabricators come to mind as a good late cycle investment, but I am unsure which to recommend, check the thread. If you do the DD I think you would like TESOF also (my second favorite, ggg), but it is very thinly traded; nontheless, I think they have a bright future and rather good fundamentals for a small company.
I hope this is helpful, and of course it is just my opinion.
Best Regards,
Roebear |
