Johnno,You are invariably right that nothing goes straight up....

Johnno,

You are invariably right that nothing goes straight up. So, if you are trading, you should set either a formal or mental stop loss 10% below the current price (less or more, depending on your tolerance/horizon/confidence/etc.). That way, you maximise your upside, but limit your downside.

So, a close at 70c would mean 63c on Monday sees you out and sitting on the sidelines, thinking about what happened. However, a correction back to 65c (very possible) would not see you over-reacting. If it happens to close at 75c on Monday, then stop-loss is 75c-7.5c=67.5c for Tuesday.

Anyway, that's just the way I think of things. It let's the runs run, but limits the downside. It does not work on lightly traded issues, however, (unless you have a small position) because one impatient person can move the stock up or down by a large percentage and, if you've built a reasonable position, it can be very hard to exit. TRY is a classic example. I hold a six figure sum in that one, but I do so only because I know and trust the company. I'm fully aware that, in a disaster, there would be no liquidity to get me out. [Having said that, TRY will be very liquid above about $3.50.]

Anyway, the gold price is the main determinate of gold share movements at the moment. Since I've been investing in gold shares from 2003 onwards, the biggest moves in equities have always been when they lead, rather than follow, the gold price itself. In turn, that always occurs when the gold price has a while without brutal corrections. Take a look at the gold price chart since the November 08 low of $US680, or so, and you will see mainly higher highs and higher lows. Even the April 09 correction down to about $US875 did not breach the primary uptrend.

Combine that with positive, company-specific fundamentals and a company-specific uncertainty earlier this year, then you have a recipe for a price re-rating.

My personal feeling is that SLR is jumping to a new range. Will 70c top that range out? Or will it be $1.00? Impossible to know. However, if you set a moving 10% stop-loss target, I reckon you've got a better chance of picking the top of the range, without limiting your potential profits too much.

Anyway, just the opinion of yet another mug.