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Paul Mosgovoy
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Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • Market Summary: CCJ, GDP, GOLD 4 comments
    Mar 26, 2014 4:09 PM | about stocks: CCJ, GDPM, GOLD

    The damage done to Cameco Corp. (NYSE:CCJ) as a result of today's session will take some time to repair.

    A factor that now may be against CCJ is that in three trading sessions, CCJ will likely post a monthly reversal bar... something that is not easily overcome.

    Unless there is an immediate move higher in the next three sessions, CCJ price action has some work to do before there may be another opportunity.

    Randgold Resources Ltd. (NASDAQ:GOLD) also retraced on the day and has taken out the low from two days ago and is approaching a known support level.

    This puts GOLD in position for a potential low-risk entry.

    (click to enlarge)GOLD Daily

    Chart by TeleChart

    Our original position (entry at 60.94) in GOLD remains intact.

    Moving on to other parts of the market. If one opportunity fails or does not meet expectations, there must be other plans waiting to be implemented.

    Now that CCJ is gone.... at least for the time being, we are able to look at Goodrich Petroleum (GDP) to see if there is opportunity.

    Starting at the monthly chart of GDP, we can see a massive downward spike (the day after an earnings release) on the largest volume ever for the stock.

    (click to enlarge)GDP Monthly

    Chart by TeleChart

    The daily chart (compressed) shows the extent of the volume.

    (click to enlarge)DGP Daily Compressed

    Chart by TeleChart

    The daily chart also shows the heavy resistance area and the beginnings of an upward trend-line.

    So, how does one know which is in effect? Is GDP going to decline further or push above resistance?

    Before that question gets answered, it should be noted that GDP has already established a trading-range from approximately 12.00 to 28.00.

    So a move that occurs within this range would result in a move well over 100% and about 15-17 points (referring to the Livermore criteria).

    Today's price action hints that GDP may indeed push above the resistance area bounded by 14.70 - 15.15.

    Looking at the daily chart (uncompressed) we see a nuance that is hard to pick up at first sight.

    (click to enlarge)GDP Daily

    Chart by TeleChart

    Volume indicates is hard for the large operators to take a position and not have it show up on the tape. They must buy or sell to get into position.

    The bar with the volume shows an attempt to drive the market lower that failed. This is the clue.

    Anything can happen and new selling may come in........ however, at this point that has not happened and GDP is trending up.

    The entry at 14.26 has a Soft Stop (discretionary) at 13.86. As is our objective with any entry, we want the risk to be "cents-per-share".

    In the case above, the risk is 40-cents/share.

    This trade is not one that is attracting a lot of attention (and volatility) like the gold and uranium markets...... it is setting up very quietly.

    Disclosure: I am long GDP, GOLD.

    Stocks: CCJ, GDPM, GOLD
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Comments (4)
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  • User 195396
    , contributor
    Comments (447) | Send Message
    Good info-also long GDP but under water.
    26 Mar 2014, 09:03 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (120) | Send Message
    Author’s reply » The huge 16.1-mil share volume on 2/20/14 signifies a changing of hands......


    This assessment of price action holds water (thus far) as GDP immediately began to move up to test resistance.


    Over the past three days there was an attempt to drive lower that has failed...... these are subtle indications but sometimes a significant move begins without fanfare.


    There is also 30% held short....... If I was short GDP and paying attention, after today I would start to cover as unobtrusively as possible.


    Thanks for the comment,


    26 Mar 2014, 10:52 PM Reply Like
  • User 195396
    , contributor
    Comments (447) | Send Message
    GOLD-solid PR on GOLD-shooting for mil oz production, increase of 24-30% (long GOLD via short puts)))

    28 Mar 2014, 12:23 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (120) | Send Message
    Author’s reply » Thanks for the link.


    Randgold is an excellent company. I especially like the fact that they did not follow the crowd (when gold/oz prices were advancing) and kept their viability estimates using $1,000/oz. gold.


    Thinking as I am writing this.....they may be planning/expecting that gold price may again be at $1,000/oz even if just temporarily.


    That would fit the forecast from Casey Research...... they are essentially in agreement with the forecast that Prechter ( put out a few years back ....that it would eventually get to $800 before going back up.


    Forecasts don't help day-to-day and some never come to pass.


    However, Randgold management really seems to be a cut above the rest and they have not raised the $1,000/oz basis for project estimates......just seems like they might know something.


    Also, if there is a spike lower, Randgold will probably be the only one in position to make an asset purchase.... and dirt cheap... (pardon the pun). That type of asset purchase at distressed prices would fit their leadership style.


    I might hazard a guess that they already have a shopping list and are just waiting....


    Thanks for the comment..... I appreciate the help.


    28 Mar 2014, 03:17 PM Reply Like
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