-- Posted Friday, 15 September 2006 | Digg This Article | Source: GoldSeek.com

Rick’s Picks

Friday, September 15, 2006

For investors who’d rather be smart than lucky 

Here’s some trading-floor wisdom that could suit us well as we continue to fish for a bottom in gold: When attempting to catch a falling piano, one should always wait until it has bounced three times.  Or so the saying goes.  Yesterday, however, we through caution to the wind, opening our arms and casting our eyes skyward as that Steinway of the bullion sector, Newmont Mining, came a-plummeting once again. Shares of the world’s largest gold producer have fallen nearly 20 percent in a little more than a week, but there was reason to believe that any significant, further decline yesterday would bring it to a Hidden Pivot support with the potential to turn the tide.

So far, we haven’t been proven wrong. The target I’d flagged at 43.75 caught the nadir of yesterday’s $2.25 swoon within a nickel, and by day’s end the stock had rebounded sufficiently to leave us with a small profit in the Oct 45 calls we’d bought to leverage this potentially important low. Or was it? It’s too early to say, since the subsequent rally had only 30 minutes to feel its oats before NYSE trading ended for the day. We have our suspicions that Newmont will see still lower prices, since our worst-case target for Comex December Gold is 513.30, well beneath yesterday’s dismal lows at $581.  But unless Newmont opens on a gap lower this morning, we will have tested this theory without much pain or  risk.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Friday, 15 September 2006 | Digg This Article | Source: GoldSeek.com

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