Gary: here is my view about a double bottom here. I think it is in place since yesterday, if you follow this coming definition.
A double bottom is a reversal pattern (at least, it suggests the possibility of a reversal pattern). Definition I use is as follows.
(a) The first bottom is formed on a high volume drop (occurred on 12/12/97 for ALTA at $1.25)
(b) Intervening rally peaked on 12/26/97 and was 14.4% from bottom (in definition I have of double bottom, the rally should be 15%!)
(c) Second bottom (1/8/98 for ALTA aat $1.25) occurs with value of +/- 3% of First bottom (Yes for ALTA)
(b) second rally occurs on lower volume (yes for ALTA)
(e) second rally goes above value of first rally (Yes for ALTA, just happened yesterday)
(f) the second bottom can be rounded (yes for ALTA)
(g) two bottom should be separated by at least a month (just short for ALTA by 3-4 days of so).
My conclusion is that ALTA's graph just about fits my definition of double bottom (from "Technical Analysis of Stock Trends", Edwards and Magee). I am therefore very bullish about ALTA and plowed as much as I could (on margin) last week and this week and carry a margin call at this time. My retirement is now 60% in FSAGX (crazy!).
I will be glad to e-mail you guys a graph of ALTA (gif file) with the double bottom pointed out as well as Negative Volume Index (a neat indicator which sometimes works...).... Just e-mail me a request at Gaston2@aol.com.
Gary: (the other one!): Is ALTA stuck below 5$? Possibly. Not if gold goes to >400$. and not if ALTA's gold production is increasing significantly and it silver and copper keep it up. I will be very happy if it goes to 3.5 from these levels. Redchip Review projected 4.88$ for target price this coming year "only if price of ounce" rises to previous levels. ALTA has a low PE as compared to goldstocks in general. I happen to think that gold has bottomed (double bottomed too) and that NO analysts will recommend gold right away... NONE... too speculative for most of them... and this could lead to a completely irrational run for gold... which is a political metal afterall. BUT I bet their portfolio's goldstocks % is increasing slowly (just IMHO). They will wait for the trend and then say something like: "maybe 5% of portfolio could be in gold stocks".
There has been a lot of negatives about gold, especially because of central banks selling (Europe, Australia) but the general older population in Europe has not abandonned gold (Europe counts too... see Compaq yesterday). Indonesia wished Bre-X still existed. Indonesia probably wished that they owned more gold (see the South Koreans who are selling their jewllery for "strong dollars"). India knows: they are buying gold in tons (1/3 of world production!). China probably too because of their currency's "artificial" stability (probable devaluation for China coming, but they will have good gold reserves). US investors are starting to buy some goldstocks (all of the above IMHO). Ramadan is closing (gold jewllery festival post Ramadan? I think). Valentine's day coming up too!
This week is critical for gold. IMHO the trend for gold will solidify up, with some attempts to lower the price (by shorts and "big players" unknow to me) as well as some small panic short covering. Just IMHO. And if gold is significantly up this week.... wait after the weekend! Just recently, goldstocks have done fairly well during big DOW down and up drafts.... good.
Good luck all... Don't make a big play in gold if you don't have the stomach (wallet) for it. Wild swings coming, IMHO, buit trend will still be up from now on (I hope).
Gaston
PS: Fidelity sector funds are not looking good this January. Gold is not looking worse than the others, for a change! |
