Why I'm Selling U.S Gold Corp - For Now

Monday morning I decided to close out on my entire holding of U.S Gold Corporation (UXG) at $5.79. Readers will probably be a bit confused by the move, given my bullish take on the gold market from last week and the fact that I doubled my position last week at $5.05.

However, while I continue to be a gold bull over the long term, I have also sat by as a UXG shareholder and watched the stock oscillate in the $5-$6 range for the past few months. The stock appears to be range bound until more serious exploration work gets underway, and I believe it will be possible to re-enter the position at a better price over the near term. With volume having remained light on the stocks recent ascent from the $5 mark, I see few technical signs to continue to hold the stock here.

While I continue to like UXG long term, the recent price rise is giving me the chance to exit the position at a small profit and look to patiently re-enter at a more advantageous price. While this admittedly risks missing potential upside if positive news is announced, I believe that the odds are in favor continued oscillation in the stock price, and I will be looking to buy future dips.

UXG 1-yr chart

Comments

[robert99:]

I dunno - I think the range correlates to the rest of the gold stocks out there, which correlates to the rangebound price of gold. You might be right that gold isn't about to break through $700, but then again, it might - And UXG will be one of the biggest benefactors. I think that at this point, a prudent plan is to begin adding on dips in anticipation of the historically bullish months for gold, beginning in August.

2007 Jul 03 05:49 AM

[gorml94:]

WHY NOT SELL COVERED CALLS INSTEAD, AS A HEDGE WITH INCOME?

2007 Jul 03 02:35 PM

[joeweissman:]

I saw your comment on US Gold. Big mistake selling now, IMHO.

Technically, I see a very bullish falling wedge, small, placed between a very large falling wedge. This is in the context of a screaming buy market in the HUI. Plus UXG has broken out of the smaller descending wedge 5 days ago. Now is the time to get back in before it breaks out of the huge descending triangle (wedge).

2007 Jul 07 03:31 PM

[fxtrader07:]

one of the many useless articles here.
the alpha content is not even ZERO, but NEGATIVE.
Trading junior gold exploration stocks is as silly as it gets

2007 Nov 20 09:55 AM