Tuesday Oct 18, 2011
Gold dropped about $40 this morning. Dave Rosenberg has suggested gold stocks will come to the forefront in the next bull move for gold. Let's check up on Hecla.
Hecla HL
This two year weekly chart for HL shows that it has moved in defined channels. It moved down in 2010, then up into 2011, and then down all this year. It looks to be falling out of the existing channel as it dd in early 2010. Both MAs are solidly down with no sign of a bottom.
This is my point about placing Buy Limit GTC orders in advance. Where is the bottom-4.5, 4.0, no one knows. But unless one has an order in at those prices one is not likely to get filled. Notice that the previous lows of 4-4.5 only lasted a matter of days if that long.
GDXJ made a similar low at 20 in February of 2010. Unless one has the order in advance, one likely would have missed that low for GDXJ. Whatever your chosen vehicle, a succession of lower orders placed in advance is the way to capture low prices.
At this point the best idea would be a succession of lower and lower orders, each for the same percentage dollar purchase. This wold be the idea of accumulating into a significant weekly low. It certainly appears that one is setting up. The entry price makes a big difference in one's final gain. The percentage gain from
5 to 11.5 is 130%
4 to 11.5 is 187%, Wow, some difference
But it can only be achieved by making sure one has orders in advance to take advantage of a short term disgust as investors drop their shares or the short sellers pile on to make a panic lack of interest low.
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