Dave Kranzler's  Instablog

Dave Kranzler
Send Message
I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance. Currently I co-manage a precious metals and mining stock... More
My company:
Golden Returns Capital
My blog:
Investment Research Dynamics
  • The Junior Mining Shares Are Being Accumulated 1 comment
    Jun 11, 2014 5:48 PM | about stocks: PLGTF, AAU, EMXX, JNUG

    …Likely by smart money. With hedge funds piling into the short side of gold and silver futures - and likely shorting and naked shorting junior mining shares aggressively - it "smells" like the smart money is starting to flow aggressively into the junior mining shares.

    My colleagues and I have noticed over the last 10 or so trading days that more often than not, the leveraged mining stock trusts are trading higher in the last few minutes of trading on big volume spikes. Today is a textbook example (click on the graph to enlarge):

    (click to enlarge)

    The graph above is a 1-minute chart of JNUG, which is 3x the GDXJ junior miner share trust. You can see the big volume spikes and the move higher in the last 20 minutes, but especially the last couple of minutes. I would surmise that the last few minutes included short-covering by the hedge funds.

    I've also noticed that junior miners with very high short positions, Allied Nevada for instance, have been popping up on any given day with no related news or apparent fundamental reason. Last Friday was Eurasian Minerals, EMXX. This week there have been several. This is both smart money accumulation and short-covering.

    The junior mining stocks are the best stock market investment opportunity that I've witnessed in nearly 30 years of studying, researching, trading and investing in all of the markets. Note: I said "stock market" investment opportunity - clearly there's been plenty of hard asset/business opportunities that have been way better than stocks. Pilot Gold (research report available) announced superb drilling results on one of its projects in Turkey and the stock popped 5% today.

    I have three stock ideas posted in my "Buy My Research" link. I just added the DenaliGuide technical analysis (link above). Nick is the best technical analyst I've come across in a long time. He understands the fundamental side of the mining business, which is rare for a technical analyst. His technical approach is no-nonsense - i.e. he doesn't impose meaningless geometric shapes on chart patterns nor does he wax on about "waves" - "oh wow, this is a C-wave dude…" He studies price/volume patterns and relationships and draws on similar analysis in related sectors like energy and commodities. He also adds humor in his presentation.

    Nick offered to provide technical analysis for the stocks on which I publish (buy or sell). His work is completely independent of what I do and the conclusions I reach. Currently we've posted his piece on Almaden Minerals (NYSEMKT:AAU). At some point these technical "tear sheets" will only be available in my research reports.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: The fund I manage has long positions in AAU, Pilot Gold, EMXX and JNUG

    Stocks: PLGTF, AAU, EMXX, JNUG
Back To Dave Kranzler's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • dutchduke
    , contributor
    Comments (58) | Send Message
    PLGTF has all the ingredients for serious upside, the fact that it has some legit sell side analyst coverage is also wonderful


    Newmont owns plenty of its shares and Mark O'Dea is a rockstar rock doctor; pretty sweet for a micro cap
    11 Jun 2014, 05:55 PM Reply Like
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.