Tuesday, July 22, 2014

A look at some gold miner charts gives us utterly no clue what comes next

Prepare to be confused. Here are four charts:

I like today's action in Asanko. It makes it look like it's about to take off again, and I'd happily buy at US$2.60. Problem is, where the hell do you put your stop?

Yo Mama Gold's chart looks like it's basing real nice, hasn't broken down, still above RSI=50, still a lot of possible upside on the chart compared to other miners.

But here's where it gets weird:

B2 is rolling over.

OK sure, B2 is diluting its shareholders. But it's buying upside in doing so. It certainly would be nice if they stopped buying other mines and actually spent time doing all that production growth that they keep promising, but they are building a high-production low-cost gold miner, and that's the type of company you'd think Wall Street Whitey would buy if they wanted to go long gold.

The problem here is B2's chart looks weak, and a loss of the SMA(50) will make Baby Jesus cry. Why does B2's chart look bad if Asanko's looks good? Is the performance divergence the result of people becoming pissed off with B2's growth strategy? Would people now prefer to own a buyout target than a buyer-outer?

Rio doesn't look as strong as Asanko. Yes, the past few days' action can be a basing before a next leg up; but it could also be a long topping pattern.

Maybe the confusion across charts is just something I should expect, considering the Lizard People have been slamming gold in the runup to this week's OpEx. Silver has held up well by comparison, and is still a tell on the underlying PM market. So maybe I can afford to wait til Friday or Monday before taking any long positions.

Then again, gold doesn't exhibit positive seasonality in years with a monsoon failure. Which we're seeing this year.

Then again then again, maybe whitey takes over from India on the gold demand side, with his expectations of US inflation and/or European deflation and/or god knows what the hell these idiots in Wall Street believe.

What to do? I'll wait for now.

1 comment:


    The Clive, the new age Peter Munk MALI, off building his empire. Yep he may MALI sell BTO some day for 5 Billion or something, but by then that will probably equate to $2.50 a share MALI. Such great value creation.

    Oh yeah there is probably some merg arb players at work. MALI