Rick's Picks
Thursday, November 2, 2006
For investors who'd rather be smart than lucky
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Gold Says "UP!"
Loud and Clear
Gold has been moving to our Hidden Pivot targets almost to-the-tick. Yesterday's forecast, for one, had called for a rally top at 617.50, and that is precisely where the COMEX December contract paused after completing the $17 thrust we'd projected. Where to next? I broached two bullish targets in the chat room whose provenance is shown on a chart reproduced in today's Touts. One of those targets is not far above, and its ability to resist the trend, even if only fleetingly, can tell use whether the futures will soon be headed up to the next. If so, gold bulls have something to cheer about, since the second target is fairly ambitious, implying as it does the biggest bull leg I've forecast in quite a while.
Meanwhile, using Call options that were acquired at excellent prices, we hold long positions in some gold stocks. In Newmont, we legged into a vertical Call spread that has left us effectively with no risk. In fact, we put on the spread for a credit, so that the worst we can do if the stock continues higher is make $30 per spread (less commissions); and the best, make $250/spread. The second position is in Goldcorp, where we established a tracking position based on the following note from a subscriber: "Picked up 18 Goldcorp November 25 Calls on Tuesday morning at around 1.25. Actually bought in before the first hour was completely up but saw that the stock was holding its own. Will you be creating a tracking position on it? Already sold eight at 1.70 (as you have told us before, taking some partial profits early allows one to be less emotional with the leftover.) Whether you decide to track it and offer advice going forward or not, thank you."
Exiting Near the Top
The subscriber had acted on the following, posted by me around 2 a.m. on Tuesday with the stock having settled the previous day at 25.38: "Goldcorp blew past a Hidden Pivot resistance at 25.42 yesterday (A=21.08 on 10/12, 30m chart) and now looks bound for another at 26.62 (A=22.64 on 10/24, 30m chart). If the stock is trading above 25.39 an hour into today's session, look for the thrust toward our target by day's end." Goldcorp subsequently opened at 26.68 before falling to as low as 25.61, but the brief rally allowed us to take profits on half of our call position, and to lower the cost basis on what remains to relative pocket change.
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Rick Ackerman
November 2, 2006
Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents © 2004, Rick Ackerman. All Rights Reserved. www.rickackerman.com
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