Monday, March 17, 2014

Lydian's chart: breakout or not?

As a contrast to the previous, here's Lydian:

Did some newsletter call a buy on LYD this weekend?

Well, there was a lot of volume at the beginning of March, and maybe that prepared the ground for a breakout of the $1-$1.20 range. Today's morning volume is a bit too much, but then again it's been like this earlier this month.

So do I sell? It's +3SD up, and Cookie doesn't like what the government is doing to screw with their asset. But at the same time, the property is a giftwrapped mine, and maybe LYD will now get bought up by people with a more rabid risk tolerance than the Legendary One, who don't think about things like the bottom-line NPV hit of moving a leach pad or what it's like to do business with Russians.

Meh. This tiny position counterbalances my tiny DPM position. So maybe I'll hold for now and see how this plays. I've learned in the past (BTO, RIO, FVI) that it's incredibly stupid to sell things that are going in the right direction. And garbage stocks with "yes but" investment theses do go up.

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