If you ask me, local goldies are not a bad place to park your money in the current climate...
Unhedged local producers are obviously a good start, but the best gains might be made from some of the more speculative near-term producers.
I like several...the stand-out for me however is CRE, which also seems to have attracted some interesting support from US institutions.
Oh yeah, they also have a Uranium angle...but that's for further down the track...for now they are intent on becoming a gold producer.
Anyway, I won't go over the fundamentals again...I have already done that in previous posts...the Technicals however are perhaps worthy of more comment.
We have just witnessed a textbook test of support at 20c over the last 2 days...what's more, the volumes traded indicate it was a very genuine one!
No doubt, the technical selling was impacted greatly by the wider carnage accross the boards, resulting in additional selling pressure...the fact it held so well in the face of such negativity, only further enforces my view that CRE has found a new benchmark.
Technically, this is a very bullish sign...the implications of which are very significant!
As I see it, over the last month or so, the market has been getting it's head around the options issue...in particular, the idea of dilution versus cash at this point in their life cycle.
Most people are aware that share prices often do weird things around options expiry dates as various forces try to push it up, whilst others attempt to force it down...the recent consolidation just below the options conversion price is indicative of such behaviour. It suggests uncertainly from the market about pushing it through 20c, yet strangely enough, is also suggestive of an underlying support for current prices.
The most recent break above 20c and failure to break below it on the recent retrace, signals more than just a technical move in my opinion...it is also suggestive of a major shift in shareholder psychology.
It appears to me that both existing and potential shareholders have finally accepted the fact the the options will be exercised now and as such, are beginning to curb their options induced trading decisions...that is, the "weirdness" is slowly easing.
If allowed to do it's own thing, I feel CRE's shareprice might finally arrive at a more appropriate technical level...something more comensurate with their fundamentals...and something much higher than current levles.
The only thing that may be an issue, as I have mentioned on numerous occassions, is the convertible note...but the more I think about this, the more convinced I am that it should help rather than hinder the price.
Interesting 8 weeks ahead in my opinion.
Cheers!
Add to My Watchlist
What is My Watchlist?