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Panning for Gold The Easy Way...Rick Ackerman
Wednesday's on-line Q&A session was quite a bit longer than usual, but it allowed me to field queries in real time from more than a dozen subscribers. Tradable issues that received coverage intraday included the mini-S&P and mini-Nasdaq contracts, as well orange juice futures, General Motors, the Housing Sector Index, Imperial Oil, Clifton Mining, July Wheat, the Health Sector Index, Silver Standard Resources, Panera Bread, July Coffee, Novagold Resources, and Golden Star Resources. A pretty exotic mix, as you can see. One issue that I overlooked was Coeur d'Alene, where we took some profits during the day. You may recall that we bought the stock a few days ago at 2.70, a hidden-pivot support that I'd advertised as a possible swing low. So far, the pivot has held up pretty well, since CDE made a bottom at exactly 2.70 and has since rallied to 3.00. For aficionados of promotional hype, that works out to an annualized gain of... let's see now... 3,600% (!!!!!). I advised some profit-taking at 2.88, then at 2.99, which has left us with a long position half the size of our initial stake, and a cost basis of 2.47. (Click on image to enlarge)
I mention all of this because the trade has conformed almost perfectly to our strategic ideal of staking out long positions in a shaky mining sector with little or no risk. My initial stop-loss below the 2.70 bid was 2.59 - somewhat wider than usual --- but the goal was to initiate a position at a low that had the potential to mark a bottom of at least short-term importance. Of course, despite the earlier profit-taking, there is still risk in the position because we continue to hold CDE shares. But by now we've lowered the position's cost basis sufficiently to cushion ourselves against a very nasty downdraft in the mining sector. And if CDE should simply move higher we'll be able to reap a nice profit at any point along the way. The important thing to note here is that we can now take a relaxed view of the stock, and monitor it with the sort of detachment that is essential to savvy timing. While I remain bearish on the precious metals sector for the near- to intermediate-term, as long as we can continue to play it in the way we have CDE, there should be relatively little stress for us during those inevitable times when things don't go our way. *** Penny Pinching Grappling with the trend? Check out Rick's Picks' archives to see how well Rick Ackerman has done with his forecasts and trading strategies. Rick Ackerman Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents ©2005, Rick Ackerman. All Rights Reserved. You can subscribe here. 321gold Inc |
