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Registered User
Joined: 3/21/2006
Posts: 4,308
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This is a great example of a break-away gap. Price needed to break through strong resistance and what better way than to just gap up over it. Price will not usually fill these kinds of gaps before it rallies to new highs.
The SPX looks like it is getting tired so we could see the markets pull back here for a rest but I would keep my eye on this one. I mentioned GMO in another thread a while back when it first gapped but price retraced down to the bottom of the gap and is now using that level as support. You can see on 3/08/10 that price was rejected at an even higher resistance level dating back to September 2009. But we have a chance here to take a ride to re-visit that level at $4.20
If we buy above Fridays high and if we buy 2,000 shares then we can make a small profit if we sell half our position at the resistance of $4.20 (sell it all if price is rejected for a second time). Do not give up on this one if that happens though. You will have a "not so bad" profit and then when price is knocking on resistance door for the third time that will usually be enough to open that door. Volume will be key at that level so watch it close.
If you do a back-test of these "break-out" gaps you will see that they do pretty well when they appear early on in a new trend.
I will trade this live in the manner in which I describe above as an experiment like I did with ABX last month.
Here is the chart.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Correction. I stated that the resistance above $4.20 dated back to September 2009. I should have said that this old resistance level dates back to the double top from early 2006.
You can see in mid 2007 that this level also acted as support. I have the critical levels highlighted in the red circles.
Also I noticed that WW has this stock on his list of charts...
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Registered User
Joined: 3/8/2010
Posts: 63
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I am with both you and WW on GMO. I think I I would get in if it breaks the descending trendline at 3.51.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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The Anatomy Of A Missed Opportunity:
Back in March I posted this one as a break-away gap. As the gap filled and price was building a nice bottom formation I slaped this in a "to re-visit" watch list and moved onto other charts.
Yes I did the re-visit thing a little to late.
This speaks to the need for having a daily check list and not getting bored with the routine. So many missed opportunities have come from lack of discipline, I do the work to find these gems but then I do not follow through....
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Registered User
Joined: 9/22/2010
Posts: 11
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Why does Worden say it has sales of $0? \
Researched, found it has burned 65% of its cash since Dec. 2009, that it plans to sell a big chunk of new shares to a Chinese entity (but hasn't yet sold/received $40 million that hangs a price of $280 million on the rest of the company), that it is a Development Stage company (which explains sales of $0). Primary assets are land/mineral rights in central Nevada. Not for the faint. Worden helps again!
Working from the numbers, Chinese paying just under $4 per share for 10+ million shares. And the Chinese have good mining experts. The operators hope to have the biggest moly mine in the world, and can sell all the moly they mine - usage contrained by supply.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Look; A Dragon....
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 Gold Customer
Joined: 4/10/2006
Posts: 954
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Mining and Metals are up and GMO is at the top of the list when you sort by the %52 week low, Probably not a bad gamble, odds look to be in your favor. I like USU, CCJ also, if things continue to look bullish for this group.
www.tickerspy.com/index/Industrial-Metals-and-Minerals-Stocks
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Howdy WW.
I like both USU & CCJ for different reasons.
USU looks to be breaking up and out from a nice looking Bollinger Band squeeze. The Daily and the weekly charts look awsome
CCJ looks good on another template that I use. Also this pattern is one that I have seen {and played} many times...
Good eye on both WW...
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Registered User
Joined: 12/2/2004
Posts: 1,775
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QUOTE (wwrightjuly4) Mining and Metals are up and GMO is at the top of the list when you sort by the %52 week low, Probably not a bad gamble, odds look to be in your favor.
I've got GMO on my watchlist but currently favor setup of URRE in the metals industry, a small cap uranium. Its setup showing about a ten day pennant, narrow range yesterday and so far today, maybe it's getting ready to move again.
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