Avocet Mining Share Discussion Threads

[budevenwiser] 15/12/2005 14:27

here you are hector


Return to Breakout: A basic tenet of technical analysis is that resistance turns into support and vice versa. When the horizontal resistance line of the ascending triangle is broken, it turns into support. Sometimes there will be a return to this support level before the move begins in earnest.
Target: Once the breakout has occurred, the price projection is found by measuring the widest distance of the pattern and applying it to the resistance breakout.


i'll give you another 2p then i'm buying

[holdontight] 15/12/2005 13:30

Yes, and one of them is AVM which for some completely crazy reason your are shorting! Why? Has just broken major resistance and you go bloody short!!! Insane! If you want to short something, take a look at ALEA.

[hectorp] 15/12/2005 13:12

You dont want to wathc wihat I do.. you have lots of stocks of your own!

[holdontight] 15/12/2005 13:08

Hector, I just dont follow you sometimes!

[hectorp] 15/12/2005 12:35

AVM weak today. Still short.
( at least I'm not listening to 'gold bull market only starting' ramps from the press).

[trader horne] 15/12/2005 11:53

Kojak, interesting remarks of yours.
I *always* assume the market is trying to screw me,
I think that's how it works.

[trader horne] 15/12/2005 11:51

A broad view from today's Daily Reckoning:-


Eric Fry - Other articles Thu 08 Dec, 2005

"The bull market in gold is still young," declared Michael Martin late last week. "I would be buying every dip on the way up...just like tech stock investors did throughout the 1990s."

On most work days, Martin, a 26-year veteran of gold-stock investing at R.F.Lafferty in New York, would prefer to see the yellow metal go up, rather than down. A rising gold price makes his clients happier, after all. But since he has seen so many down days throughout his career, he has learned to sell short gold stocks on occasion, or at least to ignore them from time to time.

"So what're you doing now, Mike?" we inquired on Tuesday. "Gold hasn't provided the convenient correction that many gold bulls have been waiting for. Are you buying gold stocks anyway?"

"Selectively, yes. Even though gold keeps chugging higher, the curious thing is that many gold stocks are not chugging higher. If you take a look at bellwethers like Newmont and Goldcorp, you'll see that they have been drifting lower, even as gold has soared to new 23-year highs. Monday's market action is a perfect example...Gold was up almost $6.00 an ounce, yet most of the major gold stocks barely budged. Newmont was up a few pennies; so is Anglo (NYSE: AU)...while Goldfields actually fell on the day. We've been seeing this kind of action for the last few days."

"I noticed that," your editor replied. "But actually, gold stocks have been lagging for about two years. What do you think these divergences mean? Are the shares pointing to a lower gold price? Or is gold pointing to higher gold stock prices?"

"Obviously," Martin replied, "on a short-term basis, you can never know what these divergences are indicating until after the fact. But on a long-term view, I think the gold share market is providing a nice little entry point. Not a great entry point, perhaps, but a nice one. If you try to get too cute in the midst of a strong bull market, you spend all your time ruing your indecision. Better to take a position with a three-year view and not worry so much about the next three weeks...That's why I'm focusing on stock-picking more than market-timing."

"So what stocks are you picking?" we inquired.

"Well I'm concentrating mostly on the mid-tier names...the prospective takeover targets. As you wrote in one of your recent columns, most of the large gold companies are shopping around for acquisitions. So I'm trying to help my clients take positions in the kinds of stocks that the big gold companies would want to buy."

"Details, please..."

"Just this week, Goldcorp snapped up Virginia Gold, which trades in Toronto...while Yamana Gold bought a little company called RNC Gold. And a few weeks ago, Goldcorp bought a stake in Wolfden Resources. It seems like there's a new deal every week."

"And you think this buyout boom is likely to continue?" we asked.

"Sure," came the reply. "It is still easier and cheaper to 'find' gold on the stock market than to find it through exploration. As long as that remains the case, the buyouts will continue. That's why I'm focusing more of my efforts on takeover candidates. The mid-tier companies, in general, offer the greatest leverage to rising gold prices. So even if no big company comes along to swoop them up, individual investors should still do very well by owning these stocks."

"Okay, fine, it all sounds nice in theory...So how about some names..." [Warning: Readers are put on notice that the following 318 words are merely rumour and guesswork quoted 3rd-hand. In no way do they constitute an incitement to risk your shirt in the high-risk arena of junior gold mining shares...]

"Well, I'll start by mentioning that a good friend of mine, a resource investor in Canada, mentioned four takeover candidates to me a few months back. They were Alamos Gold (Toront AGI), Viceroy Exploration (Toront VYE), Bolivar Gold (Toront BGC) and Greystar Resources (Toront GSL)."

"Didn't Goldfields make a recent bid for Bolivar?"

"Exactly. Out of the remaining three, I'm partial to Alamos Gold, which has some very interesting gold/silver properties in Mexico. And the company should be in commercial production early next year."

"Hmmm...most of these stocks are in the $200 million to $300 million range," we observed.

"Yeah, that seems to be the sweet spot," said Martin, "which leads directly to my personal favourite: Tan Range (Toront TNX). The stock has a $250 million market cap, a fascinating business plan and an impressive pedigree. The company's chairman and CEO is James Sinclair, who's a well-known name in the gold market. Sinclair's made millions in the gold market, even in bad times."

"I remember Sinclair...he made me a few bucks back in the mid-1990s, when I was a shareholder of Sutton Resources."

"Right, he's the guy that got the ball rolling. Through Sutton," Martin explained, "he purchased some highly prospective gold properties in Tanzania. Then he spent a few years exploring and developing the properties. Eventually, Sinclair's team proved up more than 10 million ounces and sold Sutton Resources to Barrick Gold for a very tidy profit."

"And that happened in the midst of the gold bear market!"

"Right," Martin replied, "So now that we've got a bull market, maybe Sinclair can do it again."

"Thanks Mike...One more thing. Do you own Tan Range or any of the other stocks you mentioned?"

"Of course I do," he replied, "And do you know why I own 'em?"

"Nope...Enlighten me."

"Because I think they're going higher..."

[hectorp] 15/12/2005 09:31

There is a case for the USD being stronger than most of us expect in 2006.
This may be because the Euro sterling and Yen are not good alternatives and the US is surprisingly strong still, growth wise. Ultimately the Yuan could become a strong currency but we are some years off yet.
But decide NOW if the USD will be weak or not in 2006 and there is half the answer to the price of gold. The other! half of the equation is the declared buying of gold by national banks eg Russia , and demand for gold in China. short term the Indian season is nearly over, however last year gold and oil stocks were strong till April when the market fell, it may be the same this time. Last year we did not have nations declarting an interest to add to their gold reserves. And last December we did not have the knowledge that gold.dollar would possibly demerge, as has recently been observed. So overall I'm bullish for gold in the ist half of 2006, whether or not there is a correction to $488. Buy strongly in the high $400's IMO.

[kojak78] 15/12/2005 07:56

The situation in gold stocks is really puzzling now. The current decline was anticipated by nearly all of the typical gold timers. Many retail investors have sold off 70 or 80% of their gold stocks before the gold price decline. Prioce targets of 220 for the HUI, 450 for gold are circulating.

I find that hard to believe. Agnico Eagle still trades lower than in 2002 when gold was at 330. GFI tried to surpass $15 for over three years and succeeded recently. 10% down and GFI is back below 15. The current price is still lower than in 2002 when gold traded at 320. A rise over 18 would signal a price target of over $30, a very beautiful constellation.

GSS at 2.27, in 2003 they traded above 8..

It's decision time. Either suddenly all of the retail investors have become smart and sell before declines now or it's blow-off time with immediate 30 to 40% gains in the gold stocks.

Even if we assume only US$2000 gold prices in 2013 (could very well be 3000 in 2009), we need 19% gains per year now. If gold declines to 450 in March/April that means gold would have to climb US$150 in only 9 months. Then it would have to climb 19% in 2007 without a correction down from 600. That's a 59% gain which will certainly not happen without corrections. We saw the last small correction at 465, 540 meant a 16% climb. Gold is down $35 or 6.5% now, a reasonable retracement from such an advance. A rise to new highs, another 10% correction and then to US$600 in the second half of the year before another correction and then another rise in 2007 makes much more sense than the predicted collapse in the gold price and than a 60% rise to keep the bull market alive. Speculative positions in the US$ are very high now which could mean way higher foreign currencies which would add another 10% or 20% decline in foreign gold prices. I don't think a 26% price decline in Euro gold is in store.

Without some sort of acceleration there's no way gold will achieve its ultimate price target. You can't say gold will ultimately reach US$2000 and forever be bearish/less bullish in the short term.

If gold and gold stocks decline now the bull market will be over.

[kojak78] 14/12/2005 14:27

Oil looks very oversold now. I remember the all time lows of the gold/oil ratio we made this year very well. That ratio is rising again and I guess due for a short term correction of perhaps 5%. The ratio would end up at 8. So if we have a gold correction now we have downside potential to 488. Oil should rise to 70 in the next three months. That's US$560 gold price even if gold corrects vs. oil. So the downside price targets for gold are 488 this year, 512 for January and 536 for February.

Then again we had the mainstream articles recommending gold. Well, those "investors" got screwed already. But many of them just didn't enter the market because they only had 1 week time for that. If the market wants to screw someone really bad price action is so that one enters the market, makes a small gain at the beginning and then large losses in the long term. That did not happen now as the articles were a few weeks too late for that.

Then there are the gold bugs. Many sold at 500 and didn't participate in the recent run. Those ones should be punished too. A short term correction stopping at 510 would mean they had to buy back positions at higher prices.

In summary: resumption of the bull now up to a new high and a correction in early 2006 will put much more "maximum pain" on market participants than a medium term correction now. Too many are expecting such a correction.

[kojak78] 14/12/2005 14:09

Just made a test buy, 1900 shares for 110p or US$1.95, a price we saw in November 2004 when gold traded between 430 and 450..

HUI breaking out, GFI breaking out, AEM breaking out.. resistance levels that held for 3.5 years. At those times you do buy and not sell.

[kojak78] 14/12/2005 13:48

Hmm, to be honest I had test sells in the market yesterday morning. But prices were slightly too low for the orders to get filled. Now I'm on the buying side again, only for testing purposes. HUI has broken the 2003 highs, nothing more. Hardly a time for a correction. AVM should move a few days sideways and then up to 125p. There's chance for a correction back to 110 or so. That would be an opportunity to buy even more. 325 in the HUI should be possible very soon.

[hectorp] 14/12/2005 11:49

chip, morning,
you are probably right, as usual, !
H.

[chipperfrd] 14/12/2005 10:08

My view (fwiw) is that gold will continue upwards and that good gold producers & explorers should be bought.

The strength of gold has been amply demonstrated in recent weeks and a retracement was due. But imho there is nothing to indicate that the secular bull is over.

It is not worth reacting to the short-term volatility when the big picture is so positive for gold.

Chip.

[dixi] 14/12/2005 09:59

Sure - the top may be in - but for how long - are you expecting a continual decline or simply a short term pull back before continuing higher in the new year?

Action depends on whether you are an active trader or a long term holder I guess?

[kickstart] 14/12/2005 09:36

Who knows whether we have seen a top in Gold ? I agree it looks distinctly possible but if the U.S. Trade Defecit number today is horrendous we could see a very quick reversal.
Looks to me like there is some institutional buying of AVM at this level. as I pointed out in post 1515 the small sales have continued but the bid has held.

[holdontight] 14/12/2005 09:10

gold tgop for 05 : i agree
sell producers : i disagree....in fact i would say buy them

[hectorp] 14/12/2005 09:02

Gold top in for 2005...
my view: short term, sell the gold producers AVM, OXS.
AVM has the more to fall IMO.

[budevenwiser] 13/12/2005 10:11

all being right and well , 105 should now hold , took 14 months and 4 tries to get thru that resistance level so now it should be strong support , also when breaking out from a ascending triangle it is not unusual for it to drop back to its breakout point
also dont know a lot about elliot wave patterns but this could be the start of the 3rd wave which is the most powerful

[kojak78] 13/12/2005 09:24

Not small sales, 10000 per sale.

Interesting to see that Avocet held up very very well in early 2005 at 97p when the XAU traded for 87. Then AVM underperformed and rose less than other gold stocks. To me it looks as if someone sold or shorted from Nov. 2004 to March 2005. Then again as we approached the old levels the same institution shorted still more to protect their position. Perhaps now they try to do all to get the lid back on.

Who knows what will happen, we could get back to 100p in the short term or see even another intermediate end to the bull, let's say falling prices until May. In the end Avocet will pay a maiden dividend and that's when any wrong speculation will turn sour.

[kickstart] 13/12/2005 08:56

Looks like 146,000 in small sales so far and the bid has held, must be a large buyer hovering.

[kojak78] 13/12/2005 08:17

Guess I blew my opportunity to sell some coins. I planned to do so yesterday but had no time. 453 Euro yesterday, 436 Euro today = -3.8% in a single day.

Don't know what Avocet will do, perhaps time for a nice gold stock correction, but I guess this time it's just a 1 week correction before we go higher. Maximum pain hasn't lured enough people into the gold market.

Well, I'm amazed to see people telling again and again the 2000 to 3000 price targets and then do technical analysis to show that the next correction is around the corner. If we repeat the same price pattern as in the last years we'll have the same performance, 8 to 12%. That means the US$2000 price target will be achieved in "just" 14 years. So keeping in mind that the price target is in todays dollar we need much higher annual gains, 20 to 30%. Something has to change and I bet we'll see 20 to 30% year after year after year with the possible big 50% correction on its way. Much better to put maximum pain on the gold bugs than repeating the same price patterns over and over. This time most of the traders who are so smart and made so much money in the last two years will get it wrong.

[holdontight] 12/12/2005 21:52

Are you insane? ##
25p to 80p (6 mnths) (320%)
80p to 55p (6 mnths) (-32%)
55p to 105p (6 mnths)(191%)
105p to 70p (6 mnths)(-32%)
70p to ???????????????????

[eriktherock] 12/12/2005 19:26

What a chart! good time to drop-out maybe.