-- Posted Monday, 2 February 2004 | Digg This Article
How Close To A Reversal?
With the HUI now testing our pullback target point, let us look at the technical picture.
Our yearly HUI plot shows the index now just about at our strong uptrend point – a good place for a reversal to occur. There are few layers of support from 200-208. Currently, the strongest one being the closest, around 205-208. Gold has many support areas from the $380s all the way to the low $390s.
What worries us in the short-term is the G-7 meeting in Florida this week. The agenda is the weak dollar – what to do about it? It seems quite reasonable to believe Greenspan and Co. will pressure the EU, Canadians and other countries to lower rates, cheapen their currency to help promote a strong dollar. As the Fed is unable to increase rates at this point, they will need other countries to devalue their currencies in an effort to help the weak greenback.
Such an event is sure to ignite our global, golden bull market. Dollar may stabilize or not fall as fast in the future due to relative valuations of cheapened currencies, yet gold will reflect the true value of this occurrence.
For now, use this pullback to finish reloading your short-term trading positions and leave some buying power in the event they take gold to the $380s and slam the HUI to 188 – 200 DMA. For those who watch the XAU, 87-90 are levels of great support as well. (AMONG some great buys at this point we have or are adding to our short-term trading accounts: DROOY $3.18 – after their recent earnings, Durban looks ready for a big run-up for $5-6 and higher when gold and the HUI reverses), VGZ $3.91 – Hycroft announcement should send us to $10+ this year once the public recognizes this undervalued gold find, RGLD $16.05 – A great royalty gold stock never recovered from the hatchet job in Barron’s last year after reaching nearly $30/share, NEM, $40.59 – go with the #1 gold company which will be the leader in attracting big capital in the bull run, BGO: $2.89 – a nice retracement warrants us to get back in at these attractive support levels, GG: $12.91 – hurt by the strong Canadian Dollar, Goldcorp’s Red Lake mine expansion makes this company a good buy at this point, KGC $6.66 – cost cutting measures should prove itself in the next year’s earnings, SSRI: $10.68 – an un-expiring call option on silver and silver looks poised to run for $7 and above soon, CRCUF: $.62 – great junior gold buy with possible large gold reserves in Suriname, Benzdrop is in Phase II drilling, RANGY: $10.95 – Anglogold announced last week the Morilla mine had a bad quarter with 40% decrease in output sending the shares south, fast! Good time to take advantage of the deal! There are many other wonderful companies out there not mentioned but these are among the ones we follow carefully).
Disclosure
Most of the companies recommended are owned by us and no payment have been received to recommend them.
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-- Posted Monday, 2 February 2004 | Digg This Article
Gold Seeker - How Close To A Reversal?
