Hi iso,
Thanks very much for your concern.
Personally, I've found gold and gold stocks the most difficult group for successful application of TA and chart work Me too!
The only problem with most Gold stocks, at this juncture is the relative lack of liquidity.
FWIW, I use to play the falling knife game last year on the seniors ie: PDG/ABX/FN (before the tech crash). Buy on the dips & sell on the rallies worked then, (& it should work now). Last year I had major problems holding a stock like FN or ABX or PDG as they were crashing through decade or more lows), for any length of time. It was absolutely amazing (to me) to learn first hand how many institutional investors were willing to dump excellent comapanies such as FN.to, ABX & PDG (regardless of what one thinks how they became "excellent" companies). Back then Point & Figure charting 'saved' me. That paticular type of T.A. allowed me to figure out longer term price objectives so I was able to get in & get out on a short term basis. Sometimes I made money -- sometimes I didn't. My point is this...price objectives allowed me to swing trade more or less, ( & allowed me to sleep @ night) with a pretty solid understanding of the risk that I was willing to undertake to achive reward, in any given situation.
Of course PnF is not infallible, but it is certainly helpful in conjuction with other charting methods.
Then as now, I have stop limits set, which once activated I never return to that stock (unless I made a mistake somewhere). (of course since they are mostly illiquid), most of my stop limits are mental stops).
I have been in ECO since FEB, K.to I played on & off since January, (and last year when it was a $4.00 CDN stock) etc. Some of my more recent entries are playing with 52 week highs such as GLG.to, MR.to, etc. I would rather play stocks making 52 week highs than stocks making 52 week lows.
Out of all the Gold stocks that I have played, TVX has hurt me the most (when it was a $3.00 stock...stop was way too wide) & it looks like the SOB will hurt me again tomorrow (bought it on my percieved breakout @ .70 cents CDN). Been there & done that.
I realize the risk that I am undertaking playing the junior Gold stocks. To me, right now, the risk reward ratio is worth it. (of course that may change next week or the next month...who really knows?)
As I have discussed with Frank recently, I pay more attention to the technicals than the fundamentals. IMO, I have seen repeatedly how a stock with poor fundamentals (but with a good story) beats a stock with excellent fundamentals (ie: the recent tech wreck).
I play stocks with a very high risk reward ratio, most of the time I am wrong & get stopped out.
But sometimes I am right about the T.A....
Regards,
Peter |
