Even after this run-up I see some very bullish signals setting up in the price action recently.
Fundamentally, the bullish case also remains as Ben Bernanke and the FED has pledged to keep rates low for some time and also because they have embarked on QE 2. I think it is very likely we will see QE 3,4,5 etc. eventually. Especially considering Japan is still back at a zero interest rate policy and doing even more QE here now 20 years later. There's also a lot of stories going around on JP Morgan's possible short covering going on and just how big some of these traders positions are. Whether or not there is a massive short squeeze taking place or about to take place I'm not sure but it certainly would just add to the bullish case.
There was a much larger consolidation from May through August that came before the big run we've experienced recently. This recent one is a lot smaller and tighter. Old resistance has been retested successfully where the arrow points. There was major resistance at those levels. Another bullish thing is there has been a flurry of hammer and small doji candles here around trend support. In the past months there would be hammers off trend support right before big runs.
Some potentially bearish technical things about the chart are that trend support was broken. Silver was trending very well for months but that cracked. After such a run though trend support widens so this isn't a hugely bearish signal. It is more of a neutral one at this point.
In final, if silver can push up a bit from here and hit 29.57 I see significant upside. If it fails to follow through I'll switch and be short biased.
Thomas Group (TGIS) has a market cap of $4.14 million and from the November 12th quarterly report there is $4.18 million in net current asset value. The stock had an unusual volume spike on 12-01 and printed $2.99. The price is currently at $1.90. It is pretty speculative to me as a long term hold but I think it is worth looking at over the next couple days for a trade.
Gold is pushing up around resistance in the 1,000's. This area it is approaching has been rock solid resistance as you can see from the first chart. A technician that uses normal trend lines and not an internal trend line will fail to read this market correctly in my opinion. That first line is way to high and was a result of momentum and emotions in the market. The arrows show a range that it tends to trade in. A resistance level it finds easier is in the second chart with the top resistance line.
Of course to clear all this resistance though it is going to have to take out all these spike tops. The grand daddy chart is last. You don't want to miss this.
This chart below is the chart to be looking at on gold.
This chart sends a powerful signal. It is saying that it is more than likely that gold the commodity will continue higher. Let me rephrase that. Very likely. Let me explain what I see.
The bottom red line is golds support trend line. In lamens terms the price keeps bouncing off of it and it goes higher. This is bullish and good for buyers. Price was consolidating off that trend line. The interesting and important thing here is the triangular consolidation that has taken place.
I want to wait a week or two to see what happens as gold tests its former highs. Any congestion would be bullish. If it breaks out I think it still would be a good idea to put on a position or with stocks or ETF's. There is a possibility that this could be a failed signal. In that case it would be a good short on a move to the low 900's. But the technical picture right now is buy, especially on a new high in the low 1,000 area. I'm not sure how the fundamentals support a major run. I feel like the best time to play it is if we see hyper-inflation. I can't ignore market forces though with the technical analysis. China and other foreign countries who hold US debt could up to something?
The past week or so there has been a macro play on China tightening supply of rare elements. The mining sector in general has been extremely hot this year of course off the back of metals like silver and gold rising. This latest news which I imagine is further driving speculation of supply issues has boosted the share prices of a lot of mining stocks.
Rare earth minerals have a plethora of uses from fuel, to computers, and even lasers. This company called China Direct Industries CDII does magnesium mining and has rights on zinc mines. The balance sheet has $49 million in net tangible asset value against a current market cap of just $50 million.
PARL has net current asset value of around $89 million and a market cap right now with the stock at $2.47 of about $50 million. A big bulk of NCAV is in inventory.
There was some significant volume in the stock on Friday and it is testing up against this long standing range it has been in since last year. The stock has been stuck between about $1.50 and $2.40s a share. Price action wise I think it is more likely to pull back the next couple days than start running higher. I may buy it a lower price. We'll see. I've just got it on a watchlist now.
This site xtranormal.com is pretty neat. It only took me about 15 minutes or so to make this conversation on the stock market movie.
Adams Golf ADGF this little golf club manufacturer that I've talked about a lot in the past has been bottoming out over the past several months and just recently reported their quarter. Revenue was slightly down but EPS was up huge from $.05 to $.21 year over year. They gained some market share in the US.
Net current asset value is $29 million. The market cap is currently right below at the moment at $27 million. So it is in net current asset value territory still at the moment. I bought some the other day at $4.15.
Just recently broke out of a long trading range and had strong unusual volume.
Timberline Resources (TLR) is into mining for gold, silver, zinc, and copper deposits. They've had some impressive revenue growth over the past 3 years. However no net income yet annually. Last quarter was net income positive though year over year with a profit of $241,061. Technically, right now it is still along the trend line and at the end of a triangle consolidation.
Kimber Resources (KBX) announced a new mineral resource estimate that has significant tonnage of high grade gold-silver mineral resources with excellent metallurgical recoveries. This stock ran from .60s to 1.31 currently and still might have some momentum. It has resistance however that must be dealt with in the 1.50 area.
Mines Management Inc. (MGN) is primarily a silver mining company. The technicals look a little better now that it is trying to break out of this trading range.
Endeavour Silver (EXK) so far has seen its stock price pretty correlated to the price of silver. Out of all the silver mining penny stocks it appears pretty correlated here.
The iShares Silver Trust (SLV) is a very liquid vehicle and a conservative way for making an investment in silver online in the stock market.
The silver vs gold chart shows that gold is up just over 30% this year but silver is up over 60%. Gold has gone practically parabolic currently. Is silver overbought currently? Tough to say but technically it doesn't appear so. I think these are some silver penny stocks to watch for potential upside. In the event of a hypothetical crisis I believe silver historically has outperformed gold by a wide margin.
I found a few interesting stocks below net current asset value the other day. A couple of these I know from the past as being volatile. In other words they just didn't trade super thin for months and years, rather, they have been scooped up by institutions before.
Qiao Xing Mobile Communication Co.(QXM) does handsets in China and is really beaten down here. I found it off a screen and when trying to double check to make sure it is sub NCAV if that's a major criteria for you. I didn't see a recent filing on the SEC website and don't want to put a whole lot of time into DD so do your own DD in this regard.
Infosonics Corp. is an old favorite because I made 20% on it last year over a few days and got out near the top. They distribute wireless handsets in Central and South America and distributes high-end products under the Verykool brand name. Off the balance sheet there is $25 mil in NCAV and a $16 mil market cap.
I just got filled finally today on this one at $1.13 and am long.
This is a dry bulk shipper and is beaten down but the technicals indicate it might be bottoming short term.
I really nailed this one awhile back and called the top later on it too.
Unfortunately I don't think I bought it. But, anyway it is back below NCAV of $38 million. It might be bottoming out here. If I play it I might pick it up at mid $.90s so I have a clear stop loss on the breakdown signal.