I am keeping an eye on SA gold stocks.DROOY (2.47): No sooner do...

I am keeping an eye on SA gold stocks.

DROOY (2.47): No sooner do I return DROOY to my short list than I receive the following note from a concerned subscriber: "I used to live in South Africa - the home of Durban Roodepoort Deep - and the real facts surrounding DROOY are somewhat scary. The directors have been HUGE sellers of the stock over the past year, and continue to sell huge quantities of this stock below (rand) 17.00. The reality is, this mine is not making any money," and in fact they continue to lose money each month. Their costs are in rands, and although the dollar price of gold has gone up, the rand price of gold continues to fall (about 25% to 30% in just the last year.) Just so you are aware: Unless the rand weakens (an unlikely event ), this South African gold mine will continue to lose money, to reduce staff, and possibly even close some mines. This is the reality of it. The rand-gold price has rands lower than when gold was worth US $280 ( the rand was at R 10 to 1 US $); thus the rand has a greater importance on this stock than does the gold price." I will attempt to ascertain the facts by contacting the company, but in their official pronouncements the officers have hardly been blithe. The company has indeed been struggling to contain costs; on the other hand, DROOY is well leveraged to profit from $400+ gold. On a purely technical basis, the stock's long-term chart makes me somewhat cautious. In breaching a hidden-pivot support at 2.41, DROOY has signaled a fall to as low as 1.28. This is not chiseled in stone, but the stock would need to rally above a hidden-pivot resistance at 4.52 before I'd sound the all-clear. More immediately, a 3.09 would be a heartening sign.