daytrade diaries... december 3, page-2

Today’s Picks
BCC/BCCO: Yesterday’s performance was much weaker than I expected but the cause is probably doubts over how long the delay to spud at Lee County will be. Hopefully we will hear news on that front today. Provided the delay is short (days not weeks) then interest should quickly return to the stock. News Due: Confirmation that the Pompano well has increased production to its target range of 8-10 mmcf/day. Spud of Lee County Well updated timing.

ADN: After a strong start the sellers returned pushing the price down to close near its lows. Volume was quite high which is reason for concern because it means there are some reasonably large sellers happy to part with stock at these levels. That being said the chart still looks very good for higher prices in the near term with the stochastic and RSI rising and the MACD flat (however one strong day will turn this indicator up also). News Due: Assay results due in early to mid December from the diamond drill hole at Rover 1 next to Westgold resources discovery. Indications are the grades will be very good.

GOA/GOAOA: A slightly weaker performance today but I believe that placement stock is still working its way through the system. When that is complete I believe a quick return to 5 cents is possible. The chart still looks primed for a move up in the near future. With production scheduled to start up in early 2010 at around 20K per year with a cash cost of under $400/oz GOA is ripe for a rerating. News Due: Further news regarding startup of production at the Sao Chico project. Exploration plans for the Crater Mountain project in PNG.

ATI/ATIO: The stock stabilised yesterday after the previous days falls. The market depth shows there are many sellers around the 4.5 level and further news will be required to break through this level and forge onto new highs. My warning from yesterday still holds that we have a lower high on the chart and therefore I would recommend that any newcomers wait for confirmation of a new buy signal on the chart before entering. News Due: Detailed update on the Vietnam Bauxite project. Details concerning new project acquisitions.

BAS: The pullback was sharper than I expected and the close was again below the previous 4 cent resistance level. The stochastic has crossed down and the RSI falling so I would say it is best to wait until another close above 4 cents occurs combined with a buy signal for the key indicators. The stock remains on my daytrade watchlist. News Due: Details of exploration program funded by recent capital raising.

BCN/BCNOA: BCN’s performance was disappointing given the strong rise in the gold price. It is probably related to both SPP and shortfall stock hitting the market. Nearly 70m shortfall shares were placed recently at 2.2 cents. It must be tempting for these holders to walk away with a 23% profit at 2.7 cents. The stock needs a very high volume day (50-100m) to clear this overhang, combined with rights issue holders that still want to sell. The only event which will probably cause that sort of volume is a JORC announcement. The decision that needs to be made is whether we, as traders, believe that the JORC announcement will exceed market expectations, which is what will be needed to soak up the excess stock at these levels, before surplus buyers can move prices higher. My assessment is that the market will expect a JORC resource approaching 500K based on past releases. Anything short of this and the announcement will probably be sold into. I was not encouraged by the amount of selling yesterday after such a strong increase in the gold price, especially when the market knows such a key news release from the company is due. With the gold price up strongly again overnight there will probably be another trade in BCN today. News Due: Initial JORC resource estimate for the Barlee gold Project.

UEQ: There were two buys at the open yesterday, one for 124K and the other for 248K (I suspect both orders came from the same source since one just happens to be half the other). When I checked this morning a further 600K shares have been added to the buy side at 15 and 15.5 cents, which suggests to me that a move is close. As I have stated before the daily two year chart shows a cup and handle pattern with the right handle currently being formed. The target for the completion of the handle is around 27 cents. News Due: Update on progress of negotiations to build first PhosEnergy plant to extract uranium from phosphate.

Good luck with today’s trading.