I am betting the luster comes back to Yamana Gold (AUY)

Editor — Wed, 10 Mar 2010 15:53:01 +0000

Yamana Gold, Inc. (AUY) is still reeling from the beating it took from the Street and the financial press for its last Quarter/last year’s performance. AUY missed every meaningful benchmark (revenues, cost per ton, production volumes, etc…) and those misses are compounded by the stagnant gold prices recently. To say that AUY “missed” those benchmarks is not to say that the company is in any trouble. It is still profitable and has a strong balance sheet, but the market is looking for AUY to continue to be a low-cost producer and for growth.

BUT (and, that is a BIG but), AUY might be a great chart play. It is showing that it could bounce off of near-term support and deliver a short-term gain to savvy traders.

Here is the chart with my annotations:

“Is the bad news burned into the stock price” is the simple question that traders should ask themselves. I think that it might be. Historically, AUY has had great elasticity and bounced off of oversold levels and returned some nice gains. If you were to do a year chart on AUY, you would see what I am talking about.

AUY could be a nice short-term trade. Any breaks below support and the stock should be avoided until it can build a new base…or it can issue some better news.

Golden Small Cap: AGT

Admin — Tue, 01 Sep 2009 15:45:29 +0000

Natural resource plays are very popular in the small cap stock universe. I have made good money on betting short-term on several of these resource plays. What typifies them is that they have no revenues, no income, a very weak balance sheet, but GREAT PROSPECTS. In one of my dumber trades of 2009, I chased the bid on BRZM and now I hold 10,000 shares of “crap”.

Today’s blog is about a resource play with a difference. It actually has revenues, income and assets on the balance sheet. It is a producing gold company, a so-called “junior miner”. AGT is one of a group of “junior miners” that include Claude Resources (CGR) and U.S. Gold (UXG). None of them are on par with the Newmont Mining’s (NEM) and Barrick Gold (ABX) of this world, but that is their ultimate goal. And with NEM and ABX trading at $40 and $35 respectively, they offer a gold play for small cap traders. With a spot price of $957 and persistent predictions of gold prices above $1,000, gold producers might be a good bet going forward.

I looked at the chart of all three “junior miners” and thought that AGT looked the best. It has been beaten down, but has some positives going forward. They have recently raised capital, they have had some profitable quarters in the past year (very volatile though) and they have some interesting gold properties in their portfolio. The chart indicates to me that the stock is approaching oversold status and may be in line for a bounce. It is also a stock that once you put it on your watch list, check it every day for the next two weeks. It may fall more (the 52-week low is 10 cents), but it is at a support level here at 38 cents.

Volume is off today and the stock is trading at the bottom of the Bollinger Bands. It is trading above its 200-day MA and below the 50-day. The MACD is bearish, but the histogram indicates that it is slowing. Lots of indicators are telling me that this stock that should be watched. Since it is off from its last three months highs, I would put a trailing stop on this to protect your profits.

Good luck and Good profit

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MicroStockProfit » AUY

I am betting the luster comes back to Yamana Gold (AUY)

Golden Small Cap: AGT