Tag Archives: NUGT

Is It Time To Buy More Junior Mining Stocks?

That is an impossible question to answer with any degree of conviction because the extreme degree to which the precious metals market is manipulated.   I think now is a good spot to add to positions or start new positions.  As an example, in my latest issue of the Mining Stock Journal, I recommended a high quality junior that had almost pulled back to its 200 dma.  I said I was buying it for what I thought would be a “low risk” 25-40% bounce if the pullback cycle in  the sector is over.  That stock bounced 7% today.

A good way to protect yourself somewhat is to find high quality junior mining companies that are exceedingly cheap to their underlying “intrinsic” value.  I presented a company in the latest MSJ issue that, despite a big move already, has the potential to be a 5-bagger from here.  Insiders control 44% and put in millions of their own money over the last 5 years to keep the Company going.  This Company is on its way to becoming very significant mining company.

Today I sent around to subscribers an update of a stock previously presented because the Company announced an acquisition of an existing operational mine and is paying roughly $20/oz for proved gold in the ground.  This company is “off the radar screen” but Goldcorp just paid over $100/oz in the ground for Kaminak.  This acquisition will be the catalyst that enables management to build a 200-250k oz gold producing operation by 2019.  It’s market cap is mining-stock-journal-bannerwell under $100 million.  Companies that produce 200-250k ozs/year trade in the $200 million to $400 million market cap range.  You do the math on this Company…

You can subscribe to the Mining Stock Journal and get the current issue, the current update and all the back-issues (March 4th debut) by clicking here:   MSJ Subscription.

Are The Mining Shares Rolling Down The Runway?

If anyone has been watching the trading action of the mining sector, they’ll notice that the “character” of the action has changed since the end of December.  The way I expressed it to my fund partner the other day:  “Rather than shorting the rallies and covering the sell-offs, it’s time to start going long on the sell-offs and taking profits on the rallies” (while keeping a core position intact, of course).

It’s easiest to see this point illustrated using JNUG, the 3x leveraged junior gold miners index ETF.  JNUG has carved out a nice rounded bottom and appears to be grinding higher. The entire sector is behaving like this, but it’s easiest to see it visually using a 3x ETF graph:

JNUG

Today is a perfect example, as the mining sector was hammered from the opening NYSE bell, with JNUG trading down over $3 from yesterday’s close (roughly 9.5%) to $30.15.  It’s rallied back close to $34, up nearly 1% now.  This trading action has been fairly consistent.

What’s even more striking, and something I had not really paid attention to until today, was the massive volume that has been occurring on a daily basis since early November.  This is the unmistakable of the last of the weak hands puking out their positions and the smart, patient money accumulating the shares.

I’m the first to admit that I’ve made so incorrect bottom calls on this sector since last summer.  But then again, is there anyone out there who can say they’ve succussefully been able to predict the direction of any highly manipulated market?   Having said that, I believe that the mining stocks may be rolling down the runway, preparing for a lift-off…

Putting The Current Gold/Silver Market In Proper Perspective

Follow the money.   My friend and colleague, Nick of DenaliGuide’s Summit blog has done a short video to explain why the current trading action in gold and silver – although seems quite bearish – is really a non-event.   The goal is to help ease everyone of the oppressive negative sentiment the has engulfed the precious metals investing community.

Some Nick’s “hidden” talking points include the fact that:

1)   gold and silver bottomed in last June 2013
2)  June 1st this year:   gold is up almost 3%, silver is up just over 3%;  GDX is up almost 20%

Sure doesn’t feel like the precious metals sector has had positive returns this year, does it?

Please take 2 minutes to watch Nick’s informative video:  Market Sentiment Belies The Numbers.  (Samples of Nick’s T/A research, which I use, are linked at the top of the blog)

Perhaps what’s most interesting can be seen in this graph from Nick (click to enlarge):

STEALTHshockCNP (2)

This shows the GDX index since mid-June.  As we know, gold and silver rallied along with the GDX into mid-July and have largely retraced nearly back to their June 1 starting prices. BUT, the mining stocks have been marking time in a sideways pattern.  The black line on the graph shows the amount of “stealth” accumulation that is occurring on every down-tick in the mining shares.  I have noticed this as I watch the tape every day, but this graph illustrates it.  The message:  SMART MONEY IS ACCUMULATING MINING SHARES.

I have several mining stock ideas here:   IRD Research Reports

My “Huge Upside” idea has pulled back on zero news.  I added some to the fund I manage today.  My “Short Term Trade/Long Term Investment” idea is back above my recommendation level.  I expect it to outperform going forward, assuming the precious metals sector starts trending higher.