Seeking Alpha

martinkay's  Instablog

Send Message
My name is Martin, from Cape Town, ZA. I'm the Co-Founder and Chief Editor of the growing Traders Community. I've an experience of over 8 years in Forex as a Portfolio manager, Trader and guest writer for many financiel and forex websites such as,... More
My company:
Binary Options that Suck
View martinkay's Instablogs on:
  • Time To Throw In The Towel On Gold

    Sudden spikes in gold prices can be deceiving as the precious metal is prone to sink to new lows, before the trend will finally enter into reversal.

    After a lengthy decline, gold prices suddenly spiked and investors are wondering whether this is the moment to jump back on the bandwagon. Some like to believe that the precious metal has finally hit rock bottom and from this point onwards it will only go up. The number of bearish investors is still vastly superior, but the fact that for the first time in months a few bulls have emerged makes it worth discussing the matter. The gold contraction story is far from over and binary options traders should stay alert.

    World Gold Council Data Hike Prices

    There were so few good news about gold this year that when the World Gold Council released its latest numbers, the markets responded immediately. The fundamentals for gold haven't changed and this makes it even more awkward to see that the precious metal keep going downhill. Traders keep moving into equities and stock and out of gold and this is what moves the markets, not a vast conspiracy as some would like us to believe. What comes goes around comes around and the same mechanisms that drove the gold price down, will eventually lead to a reversal of this trend.

    The World Gold Council highlighted the fact that central banks stepped up their gold buying policies and the jewelry sales are also on the rise. Confidence in paper currency is still relatively low and the FED's endless quantitative easing is not helpful in any way. The Federal Reserve suggested that the time to end money printing might come sooner than expected and these rumors are also responsible for the sudden revival of gold prices. Sadly, it is hard to believe that QE will end anytime soon and after the enthusiasm dwindles, gold prices will resume their fall.

    Short and Long Term Investment Implications

    Technical analysis suggests that right now ETFs shorting gold are going to prove profitable and the gold price hike is just an isolated event. The bottom of gold is yet to be reached and an intelligent short term play for binary options traders would be to but put options that expire soon. Perhaps the most dangerous bets are the ones made on medium term, as it is uncertain how much will the prices tumble and some investors could find themselves at the wrong end of trades.

    Long term forecasts suggest the exact opposite, as the fundamentals haven't changed for gold and the precious metal remains an excellent investment for those who play the long game. The true question is how long it will take before the fundamentals will prevail and when will this drastic correction in gold prices end. Traders need to stay flexible and shift between betting against gold on the short run while doing the exact opposite on the long run.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 25 9:38 AM | Link | Comment!
  • France Telecom Stock Is Too Cheap Not To Buy

    France Telecom is frequently depicted as a wooden giant, who can no longer sustain its own weight and is about to tumble and crush anyone resting in its shade. In just two years, the stock lost almost half of its worth and from values of $25 per share in 2008, it sank to new depths of less than $10. A record low was hit just a week ago and even though the stock rebounded in the next couple of days, investors are jittery and wonder whether there is any point in keeping their positions.

    $9 per Share Is a Freebie

    To say that France Telecom is not faring well would be an understatement but the reason for why the stock is at historic lows has a lot to do with its debt. Many perceive it as crushing and they don't like the economical context in France either, with these two factors leading to the massive worth of equity. The French government still has a share of 27%, and this means that even though the laws are not necessarily in the best interest of large companies this one might enjoy slight advantages.

    Another thing that can't be overlooked is the fact that France Telecom has a 37% market share and including customers from beyond borders they serve roughly 230 million. The paradox is that while the stock is now inching closer to nine dollars per share the number of customers is increasing by 2.5% each year and there are some countries where the number is much higher. Simply put, binary options traders shouldn't miss out on the opportunity to buy call options if the stock eventually breaks the nine dollars line. At this value France Telecom is a freebie and the risks of it going even lower are remote.

    France Telecom Is Here To Stay

    There is no way for France to go bankrupt in the imminent future or for its 230 million customers to suddenly decide that France Telecom services are too expensive. Even though the prices are slightly above average, the company has its ways of retaining most of its customers and the number of those who depart is offset by new clients. Regardless of what happens in France, people will be still using mobile phones and there is no technology at the horizon to replace existing one overnight.

    Some changes need to be done for the company to increase its profitability, and officially becoming Orange in July is not enough but it is one step into the right direction. France Telecom needs to make the most of its presence in the European Union, with the main concern being the potential elimination of roaming fees. This is one circumstance in which FTE stock could sink even further, but it is a highly unlikely scenario and right now the right thing to do is to buy call options because the stock is undersold.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 03 11:53 AM | Link | Comment!
  • Ambitious Projects On The Line For Noble Energy

    When binary options traders are aiming truly remarkable profits, they focus on those companies whose stock could advance firmly in one direction or the other. Volatility is their friend as long as they can forecast the outcome and it is just as easy to take advantage of a plunging stock as it is to capitalize on one surging. Noble Energy stock can safely be included in the latter category, as the company has high expectations for the upcoming years and they should translate into higher prices.

    The Eastern Mediterranean Gas Reserves

    Although Noble Energy has most of its reserves in the United States, some of its most profitable projects are located elsewhere. The company intends to tap into the large gas reserves in the Eastern Mediterranean which are estimated at roughly 1000 billion cubic meters. The proximity to Turkey and the numerous conflicts between this country and Cyprus raise some questions about the possibility of Noble Energy running into an international scandal and having production slowed down or even stopped.

    The risks are minimal and the upside considerable, so it is only safe to assume that if the company starts drilling in the Eastern Mediterranean, is profits will go up right away. Another interesting opportunity in the area comes from Israel, which could become one of the leading countries in a energy production in the next decade. Huge reserves have been discovered in Israel at Noble Energy plans on exploring them through the Leviathan 4 project which is already on its way. Conventional traders can safely purchase their stock and wait for the prices to rise, whereas binary options traders can't afford the luxury.

    Strong First-Quarter Results for Noble Energy

    One of the reasons for why Noble Energy is such a solid company and one worth investing in is that most of its resources are located in United States. This means that it is most unlikely for production to be severely affected at any time and on the long run the company will have an easier mission in overcoming any obstacle. The sheer reserves in Elko will make it very profitable to begin production in United States and in less than a decade the country could produce over 10 million barrels per day.

    The company has reported a net income that exceeds expectations on a revenue of 1.1 billion, an increase of $12 million from last quarter. Interesting figures were provided by the discretionary cash flow report with an increase of $71 million compared to 2012. Noble Energy has signed potentially profitable partnerships and it has the resources to begin production in both Israel and Equatorial Guinea. When the company has both the money and the tool to put it to work, the sky is the limit and Noble Energy is in this fortunate position.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: Noble Energy
    Jun 25 3:57 PM | Link | Comment!
Full index of posts »
Latest Followers


More »
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.