-- Posted 19 September, 2006 | Digg This Article

Rick’s Picks

Wednesday, September 20, 2006

For investors who’d rather be smart than lucky 

Gold stocks got pounded once again yesterday, buttressing an earlier forecast here of a further decline in December Gold futures to at least $513. We’ll continue to fish for a bottom in selected stocks as gold falls, since this can nearly always be done without risking much more than small change, However, I have my doubts that any significant turn will occur before the target is reached.

In the meantime, the Rick’s Picks chat room has been attracting its share of gold bugs, some of whom are becoming adept at buying mining stocks at Hiden Pivot supports without risking an arm and a leg. (When we tried this in Newmont last week, we actually exited with a small profit on a long position before the stock succumbed once again to gravity.)

One stock that attracted particular interest in the chat room yesterday morning was Coeur d’Alene, a popular silver play. A Hidden Pivot denizen posted a “buy” in CDE shares at a support that proved to be just 11 cents off the intraday low,  and although the subsequent bounce left him in-the-black by day’s end, the rally was not quite strong enough to have made him very confident about holding the stock overnight.

There is good reason to be cautious in silver, as I pointed out during the session. To wit, last Friday’s low in December Silver at 10.55 created a menacing impulse leg of daily-chart magnitude. This suggests that the Decembers are about to fall to 9.61 or lower, which if true would have bearish implications for Coeur d’Alene, not to mention dozens of other companies that produce silver.

Not surprisingly, crude oil is showing signs of further fatigue as well. The downside target we looked at in the chat room is 60.57, basis the December mini-contract. If it’s achieved, that would represent a decline of 2.5 percent from current levels, with a similar decline expected in the pit-traded futures.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted 19 September, 2006 | Digg This Article

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