All That Glitters May Be Ready to Shine Again

07/07/2006 12:00 am EST

Focus:

Jon Markman

Editor, Trader's Advantage

“I observed that the big advance in the market at the end of last week was probably not sustainable in the near-term, and I recommended that subscribers sell stocks and options that had appreciated a lot in that explosive, giddy-up move”, writes Jon Markman in Trader's Advantage.

 

“What’s next? The price of gold and silver made multi-decade highs in the past several months, powering shares of companies related to the precious metals complex higher. Now, after consolidation in the prices of gold and silver, both the metals themselves and the related stocks are poised to move higher, and perhaps much higher. At the same time, I think that technology, industrial, and retailer stocks will continue to suffer.” And on that note, here are some of the companies that Markman is currently recommending…

 

Cambior (CBJ ASE) is a Canada-based company engaged in the mining, exploration, and development of mineral properties, primarily gold, niobium (a chemical element that is found in the ductile gray metal niobite and used in specialty metals and to strengthen welded joints) and bauxite. The company has several developmental projects underway to increase its revenues and its reserves. The stock performed very poorly in May and early June, but has stabilized in the past three weeks. CBJ has broken its downtrend and looks as if it is ready to return to the mid-$3 area. Buy DBJ at current prices with an initial target of $3.30. Stop the position on a close beneath $2.50.

 

Seabridge Gold (SA ASE) is very similar to the other junior golds: Another developmental mining company. Seabridge has 100% interests in nine North American gold resource projects. The chart on the company’s shares shows the stock has broken to a new high, while the price of an ounce of gold is not close to doing so. And Seabridge’s uptrend is still intact. Buy SA at current prices. Target is $15. Stop the position on close beneath $10.50.”

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