Thursday, December 03, 2009

Great Basin Revisited

Since my last post on GBG, the company has reported earnings, and gold has gone into parabolic mode. GBG has not been the leader in any of this, but it is a name that I've held. It has been undergoing a very nice consolidation pattern, though it has been nothing short of a laggard. The volume patterns and price action appear constructive to my eye, and I expect this stock to break out with some earnest here.

Here's a chart of GBG through the close of the day yesterday:
(Click to make larger)

And, here is a chart of GLD in parabolic mode!

(Click to make larger)


Parabolic conditions offer great reward with commensurate great risk. While I would prefer that GBG not be such a laggard, my expectation is that there will be some price appreciation here. And my risk/reward modality is such that I would not enter new positions here.

Position: Long GBG

3 comments:

Glenn_in_MA said...

You just KNOW that banks are using smoke and mirrors to report their current earnings. Here's a nice piece that reveals and explains it succinctly.

http://www.annaly.com/blog/?p=735

Biffermas (Chris) said...

That is a nice setup on GBG, with huge support just below the breakout. How strange that a gold stock is performing in such a laggard fashion.

Leisa said...

Glenn: Thanks for this link. It must be popular, as another sent it to me as well!

Biffermas: YEs, I have a knack for the laggards!