NUGT forms a Cup and Handle Pattern

by JDH on October 22, 2016

Is this the bottom?  I don’t know, but it looks promising.


As the chart of NUGT – Direxion Daily Gold Miners Bull 3x Shares NYSE + BATS (a 3x leveraged ETF) shows, the bottom may be in the $11 range.  It closed Friday at $14.44.

Of course this could be yet another “bear trap” rally.  Who knows.

The down trend line from August is still intact, so before we can declare victory, two things must occur:

First, a close above $15.89, the lowest Fibonnaci level, and then second, a close above the down trend line, probably around $18.

Regardless, it’s encouraging.  This week I liquidated some of the holdings I bought to average down.  I booked a profit, and increased my cash, so that’s good.  I’m still under-water, big time, on this holding, but I don’t think it takes a massive amount of imagination to return to the levels of August, at which point I’d be in a significant profit position.  So, we wait.

Here’s another view of NUGT:


Since the beginning of October NUGT has developed a classic cup and handle pattern. After the big shakeout on October 4, sellers clearly were drying up.  What followed was a few days of consolidation, and a fight with the 200 Day Moving Average at the bottom of the cup.  The close on Friday was slightly above the 200 DMA.

The handle of the cup is a low volume pullback, which is good.  Presumably as the anemic volume increases this week we break out of the cup and handle pattern, and the next target will be to fill the gap between roughly $16 and $17, which is where the cup and handle pattern started.

Filling that gap, and remaining decisively above the 200 DMA, and having the 200 DMA cross over the 50 DMA, would signal that the bottom is in.

Or not.  This may all be mumbo-jumbo.  We will know soon enough.

Bear in mind that NUGT is not a core holding in my retirement portfolio.  This is closer to gambling than investing (or we could call it speculating).

I still believe there are cracks in the economy, and with the U.S. election looming on November 8, anything can happen, and probably will.  Uncertainty and upheaval is generally good for gold.

We shall see.  For now, I’m not selling.  Thanks for reading.  More next week.

An interesting new stock to watch

by JDH on October 11, 2016

The gold market continues to bounce around, doing nothing, so let’s discuss instead an interesting new gold (and copper) play: JDL Gold Corp.

On August 15, 2016 three companies announced their amalgamation to form JDL Gold Corp.:

Lowell Copper, Gold Mountain Mining and Anthem United Announce a Proposed Combination to Create a New Multi-Asset Gold and Copper Company

Further details, including announcing the name JDL Gold Corp., were announced on August 31, 2016

This is big news, because three good companies, with good management, will become one great company.

The merger was completed on October 7, with the three predecessor companies ceasing to exist, and JDL (ticker symbol JDL.V) beginning to trade.  The company is so new that their website is still under construction, but you can find the JDL Corporate presentation here, and here’s the gist of it:

  • current market cap: $135 million Canadian
  • cash: $65 million, so ready to make some acquisitions

There are three projects:

  1. Elk Gold in British Columbia, past producing mine
  2. Warintza in Ecuador, lots of copper, kicking off cash now
  3. Koricancha Mill in Peru, huge gold processing capacity

So you have current gold production, a historic gold mine with a high grade resource, and a big copper project.  This is a diversified portfolio, positioned for growth.

The key is management: senior people, with a lot of their own money on the table.

It won’t be $2 forever, so if you want a diversified, moderate risk investment with upside, here you go.

I’ll monitor it and report any further developments.

Thanks for reading; see you next week.

Alterra Power Corp. Financing

October 8, 2016

I will not bore you with additional elaboration on the problems in the gold market, other than to say that I’m not losing any sleep over it, I’m not selling, and I expect better days ahead. I did have a heart attack this week, however, when AXY.TO – Alterra Power Corp. announced a $50 million […]

Read the full article →

See You Next Week

October 1, 2016

I have nothing to say today, so I will save you the trouble of reading, and wish you well, and tell you that I am working on a report on a new stock, so tune in next week for that, because it’s a good one. For those of you still here, nothing to see here. […]

Read the full article →

The Fed are the Greatest People in the World

September 24, 2016

Of course I’m being facetious.  The Federal Reserve in the U.S.A, and the Bank of Canada, and all central bankers everywhere, are useless.  You do not need a group of men and women to control the money supply.  We had money before the Fed, and we also had minimal inflation/deflation, and close to full employment. […]

Read the full article →

Gold: The Correction Continues

September 17, 2016

It was not a great week for NUGT – Direxion Daily Gold Miners Bull 3x Shares NYSE + BATS, or for those of us who trade it as a proxy for gold. It did climb over $21, briefly, on Monday, but it also touched $17.37 on Friday, before closing for the week at $18.21.  Since it […]

Read the full article →

Gold: Correction, or End of the Ride?

September 10, 2016

Let’s look at the evidence, using NUGT – Direxion Daily Gold Miners Bull 3x Shares NYSE + BATS as the proxy for gold (because it’s a 3x leveraged ETF, so it has more volatility than gold shares, or gold). The week started out good.  After an intra-day low below $21 on Monday, NUGT gapped open up on […]

Read the full article →

A Quick Lesson in Bouncing Back

September 3, 2016

This is the Labour Day weekend in Canada (Labor Day in the USA); the weather is good here in southern Ontario (not so great where hurricanes are in Florida and earthquakes are reported this morning in Oklahoma), so I will keep this brief and touch on two matters. First, I have read with interest the […]

Read the full article →

Two Heart Attacks in Two Days

August 27, 2016

Not real heart attacks.  Figurative heart attacks. As you know, my favorite vehicle for speculating on the price of gold isNUGT – Direxion Daily Gold Miners Bull 3x Shares NYSE + BATS, a 3x leveraged ETF.  As you can see from this chart, NUGT opened on the morning of August 23 at over $29, and […]

Read the full article →

Alterra Power Corp.

August 20, 2016

There are two ways to make money investing in stocks: capital gains, and dividends.  With most stocks, it’s one or the other.  Today we discuss a stock that will, I believe, end up providing both streams, and that makes it a great, relatively low risk investment: Alterra Power Corp. As regular readers of this blog […]

Read the full article →