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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: loantech who wrote (11160)5/12/2006 12:40:29 PM
From: Mr. Aloha  Read Replies (3) of 78416
 
As I've posted, I've been expecting a pullback on MMGG because of the extreme overbought readings on the daily chart. Short-term traders have to book profits, and nothing goes straight up without resting no matter how good the news/fundamentals are. The weakness in metals stocks and the overall stock market yesterday and today contributed to MMGG's weakness from the high.

I think this retracement is very healthy for the technicals. It allows some of the long-term investors who've been waiting for a pullback a chance to get in while the short-term traders jump off. After yesterday's silver results, the fundamentals are obviously much better now, so long term the stock should go much higher. Short-term traders don't care about the long term, but many of the people buying the shares from them today do.

Yes, a retracement of about half of a fast move is normal, and there are other "Fibonacci" numbers for % retracements (38.2%, 61.8%). The most important things to me technically are the RSI has come down from the extreme readings yesterday, and the stock is back below its upper Bollinger Band. It's much better set up now to make a sustained move higher, perhaps after consolidating for a while.

The stock should have support near the previous all-time high of 4.37 and the low the other day of 4.32, as well as the pre-gap high from Tuesday of 3.93.
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