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January 28, 2011

BMR Morning Market Musings…

Gold dropped as low as $1,308 overnight but is now recovering…as of 7:40 am Pacific, the yellow metal  is up $12 an ounce at $1,327…Silver was down over 40 cents overnight but has also reversed and is now up 57 cents at $27.49…we remain convinced that $1,300 is “the line in the sand” on Gold as John’s recent “Big Golden Picture” chart outlined very effectively…the U.S. Dollar Index is up over one-quarter of a point at 78.05…the U.S. economy grew at a solid 3.2% annual rate in the final quarter of last year, slightly below expectations…this is after 2.6% growth in the third quarter…for all of 2010, the U.S. economy grew at a rate of 2.9%, its biggest gain since 2005…much stronger growth however will be required to put a dent in the high U.S. unemployment rate which is currently sitting (officially) at 9.4%…massive government deficits and debt at the federal, state and local levels is likely going to put a cap on U.S. growth in our view and force the Fed to maintain a very accommodating monetary policy for an extended period…the CDNX is ahead 13 points at 2247…the reason Gold is not about to fall off the cliff right now is because the action in the CDNX is clearly refuting that argument…also, while Gold made a new low yesterday, stocks did not…all signs point to a much better February as we believe Gold has found its bottom…Gold Bullion Development (GBB, TSX-V) touched its 100-day moving average (SMA) again this morning where there is exceptional support…this happened back in September, October and November, just prior to a major upside move…GBB’s chart continues to be a picture of beauty and based on the chart pattern we’ve seen over the past year, another important low has just been put in at 67 cents…GBB is recovering and is now up 2 pennies at 71 cents…Currie Rose Resources (CUI, TSX-V) is showing clear signs of bottoming out as well based on several indicators including heavily oversold RSI and Stochastics levels…CUI appears to have found strong support just above its still-rising 200-day moving average (SMA)…Currie Rose is currently off half a penny at 15.5 cents…Abcourt Mines (ABI, TSX-V), which got a buy recommendation yesterday from analyst Clive Maund, is ahead a penny at 19.5 cents…the ABI chart looks exceptionally strong going into February as Maund also pointed out…Adventure Gold (AGE, TSX-V) is showing renewed strength…it’s currently up 3 pennies at 45 cents…bargain hunters have stepped in on Seafield Resources (SFF, TSX-V) which dropped as low as 47 cents this morning…it’s currently unchanged at 49 cents…we remain very optimistic regarding Seafield and its trading action since early December has been bullish…GoldQuest Mining (GQC, TSX-V) out-performed the market in January which bodes extremely well for next month…it also has a great-looking chart and strong underlying fundamentals with a substantial deposit taking shape at its La Escandalosa Property in the DR…GQC is up half a penny at 38 cents…February is when GQC could finally bust through resistance in the low 40’s…Sidon International (SD, TSX-V) is unchanged at 13.5 cents, just above rock-solid technical support with a rising 200-day moving average (SMA)…Cadillac Mining (CQX, TSX-V) is up 2.5 cents at 29.5 cents…it had a strong but healthy pullback this month and a turnaround in February seems likely…

21 Comments

  1. Everton Resources, Dominican Republic, drilling results were released yesterday, What was just a VMS target appears to now be a VMS deposit. Comments by Everton elsewhere about VMS deposits, may indicate, that they are not that common but account for a significant portion of Canada’s production of Ag,Cu and Zn.

    BMR said to expect results soon and now my question is what to you think of them?

    Comment by george wohanka — January 28, 2011 @ 7:52 am

  2. I am in the business since 22 years and I a know that stocks are also bought because they are the flavor of the month or the year. I think gold is loosing it’s taste for investors and uranium is comming back . With spot price now at almost twice the price of last summer … I think uranium will be the flavor of the year. Do you have any attention to start looking at Uranium stocks. Thanks.

    Comment by Andre — January 28, 2011 @ 8:17 am

  3. Andre, i agree with Uramium as being a big play in 2011 but i have a problem in picking a winner out of the bunch. I like CCO but i find it high on the valuation. UUU carries a lot of risks and i dont like the management of DML. What do you have as your top picks for Uranium?

    Comment by Yuri — January 28, 2011 @ 8:32 am

  4. Hi yuri. it’s been 3 years that i am out of Uranium so I am back in the learning process. One stock that I find pretty cheap at this point is URC. Like GBB for gold . URC is a massive low grade shallow Uranium deposit with all the avantage to be very close to all modern facilities (medium town,roads,electricity) and also just beside the St-laurence .

    Comment by Andre — January 28, 2011 @ 9:05 am

  5. URC Uracan Resources on the toronto ventur exchange.

    Comment by Andre — January 28, 2011 @ 9:07 am

  6. For Uranium: WU (tsx-v) as a producer – huge growth potential, and DIT (tsx-v) for exploration – big find possible at their otish property.

    Comment by Josh — January 28, 2011 @ 9:08 am

  7. Yesterday was the 6th time since 09 to tap the 150 dma and bounce,never has the 150 been breached in 2 years! Could be the bottom here folks!!

    Comment by dave — January 28, 2011 @ 9:53 am

  8. It appears that GBB will have some good news coming soon…. I got 10,000 shares more this morning… at 67 cents. Will not see this again my friend…. I like to invest in this stock … so many good opportunities for buying.

    Comment by Theodore — January 28, 2011 @ 10:37 am

  9. Hello.

    Buy rec on ABI, did they have any numbers, 0,50 cad or higher?

    Comment by Carl — January 28, 2011 @ 11:24 am

  10. Hi Carl, Clive runs a subscription-based web site, so out of respect for that and the site’s rules, I can’t repeat specifically what was stated. I hope you understand. I would recommend his service, it’s not expensive. Needless to say, he has an extremely favorable view of ABI based on technical analysis. That’s what he is – a technical analyst, and he’s very good at what he does. I don’t always agree with him but I respect his work. In the case of ABI, I completely agree with his analysis of the chart. Of course we have our own chart analyst at BMR who is extremely gifted and that’s John, and I’m sure you’ve seen John’s take on ABI. Just as bullish as Maund’s. At BMR we also examine the fundamentals very closely and try to tie everything together. ABI is sitting on substantial reserves and resources (silver, gold and zinc) at two properties (two past producers). A few years back this stock ran from 15 cents to $1.40 in something like 9 months. That shows you the potential.

    Comment by Jon - BMR — January 28, 2011 @ 4:11 pm

  11. Where do you see the best short term potential; CQX or ABI? I own shares for the long run in both of these but I have some new money and I really need to spend it…

    Comment by Mike — January 29, 2011 @ 5:07 am

  12. Hi Mike, I’m sorry but I just can’t say…..we don’t give price targets…..we introduce what we believe, through extensive research, are extremely attractive situations and potential home run opportunities….investors need to do their own due diligence and decide for themselves where they see a stock headed to over the short-term, and that’s very hard to predict especially with these speculative juniors…..there are so many factors……..we tend to be more interested in the longer term……from a technical standpoint CQX has pulled back considerably from its 50-cent high and is currently in a zone of very strong technical support between 25 and 30 cents…..ABI has exceptional technical support between 15.5 and 17 cents……with current resistance on the upside in the .22 to .24 range……

    Comment by Jon - BMR — January 29, 2011 @ 6:58 am

  13. Hi
    As a newer small cap investor I was wondering if there are signs to recognize when a stock is overbought. Since I am attempting to do more profit taking, while keeping a core position as well as a trading position, I have missed opportunities many times. I know it is important to try to get your initial capital out asap but I intend to re-buy the trading half at a lower price maintaining my full position.

    Thanks you for all your support, advise and teachings,
    Andrea

    Comment by andrea — January 29, 2011 @ 8:58 am

  14. Andrea, I’ll ask John to give his thoughts on this and I’m sure others may chime in as well. Personally, I find the RSI(14) to be extremely effective in terms of giving the initial warning signal that a stock is overbought and one should be cautious (anything 75 or over generally)…combined with some other indicators, like Stochastics and the CMF, you’ll have an excellent idea….of course you have to look also at overall resistance and support levels (with the price and RSI), moving averages and if a stock has gotten wildly ahead of its major moving averages…plus consider fundamentals too and the state of the overall market….so there are a wide range of things to look at in order to conclude that it might be an advantageous time to sell…….having said that, if you’re trying to move in and out of a stock, this can be very tricky……emotions can mess you up as well………if you pick a really good situation, sometimes the best thing is just to put it away and hang on to it for a while…..

    Comment by Jon - BMR — January 29, 2011 @ 9:22 am

  15. Hi John, I have done my own DD but I’m not an expert on TA.
    Like I said, I’m already a shareholder i both of the companies.

    I know you guys don’t give price targets, I guess I consider your GUESS beeing worth a lot.

    Thans for your superb work!

    Comment by Mike — January 29, 2011 @ 9:24 am

  16. Hi Andrea
    Thank you for your interesting question.
    I am very busy at the moment but I will answer your question later in the day.

    Comment by John - BMR — January 29, 2011 @ 9:56 am

  17. Do you have anything new about Cadillac from your recent trip to Granada that you will bring up on the blog shortly? I’m pretty sure I did read a while ago that some exciting news/info about CQX will be covered after your trip. Did I miss it or are you guys still working on it?

    Comment by J.C. — January 29, 2011 @ 12:49 pm

  18. We do but one thing we’re waiting for is Richmont to release additional results and a new resource estimate for Wasamac – that’s expected within 2 weeks…

    Comment by Jon - BMR — January 29, 2011 @ 2:20 pm

  19. Alright, thanks..

    Comment by J.C. — January 29, 2011 @ 4:30 pm

  20. Additional results? What results have been released
    so far? Must have missed that, I thought that all of CQX properties was
    unexplored..

    Comment by Mike — January 29, 2011 @ 10:38 pm

  21. Mike, Richmont is Richmont and not Cadillac. But their property is next to Cadillacs, so therefor their results can have impact on CQX. So lets hope they dig up a couple of Moz(!)

    Comment by J.C. — January 30, 2011 @ 11:52 am

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