Friday, December 13, 2013

I bought a gold stock yesterday:

There is a difference between trading and investing. For trading I don’t usually buy gold stocks because I think you get more opportunities in the small cap technology and health science names,

However yesterdays price behaviour in the CME Feb gold contact and the price behaviour in many of the gold miners was a compelling divergence signal. The metal was down sharply and yet many of the miners were about to close up on the day. I bought some B2Gold Corp. (BTO) just before the close at $2.15 for several technical reasons. The weekly chart (I rarely use dailies) displays several positive technical signals – first of which is the higher weekly price and the double bottom. We also have an intermediate cycle trough and the money flow numbers – while not compelling did not break down. If the price posts a daily close under the lowest low of 10-weeks ago ($1.98) I am gone.

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