Time to Sell Santoy, but Hold Mawson?

by JDH on December 23, 2006

Earlier today I wrote an article pleased that I guessed correctly that The Dines Letter may be advising the purchase of SAN.V – Santoy Resources Ltd. , and to a lesser extent, MAW.V – Mawson Resources Ltd. The charts of both of these stocks are interesting.

First, Santoy has already had a huge run, from it’s peak of 90 cents on April 12, 2006 to the low for the year at 29 cents on October 11, it has now recovered all the way back to 81 cents. Here’s the one year chart:


There was a big spike up on December 6, when it bounced as high as 74 cents on 3.6 million shares traded, but closed back on 64 cents (it had closed at 55 cents the day before, for a 9% gain, but a peak gain on the day of 34%). Here’s the three month chart:


Why the spike? My guess is it’s because in the December 5 Dines Letter Mr. Dines said he was “especially impressed with the Upside power” in Mawson and Santoy, so obviously a lot of his subscribers started buying. If a comment like that can increase the volume from 500,000 on December 5 (the newsletter was released after the close of the market) to 3.6 million shares the next day, it is possible that next Wednesday we will see a similar uptick. 1.4 million shares traded on Friday, so it is likely we could see over 4 million shares traded, although reduced holiday trading may keep a lid on the volume.

What to do? 90 cents would be a new high, and we have already had a huge run up, so I would be very tempted to put in a sell order at between 90 cents and $1.00, on the theory that that’s where the overhead resistance, and psychological barriers, will hit. On December 6 it spiked up as much as 34%, which if that happens again would mean a price of $1.08. A 9% spike would take Santoy up to 88 cents.

It’s come a long way fast, so I will put in a sell order at 95 cents. If it doesn’t get filled, no problem, I’ll hold. My cost is around 68 cents, so that sounds like a nice little profit for less than two week’s work.

As for Mawson, it has also had a big run, from a peak of $2.10 on May 11 to a bottom of 82 cents on June 30 (talk about volatility).


It has climbed back to close at $1.63 on Friday. Mawson also had a big spike on December 6, going from a close on December 5 of $1.37 to a peak on December 6 of $1.65, closing at $1.60, for a gain of almost 17% on the day. Volume also spiked to 723,600 shares, as compared to only 39,000 the day before (at least we know Dines wasn’t doing any trading the day before).

Unlike Santoy, however, Mawson is nowhere close to getting back to it’s high for the year. In fact, here’s the three month chart:


It shows that Mawson has been consolidating since December 6, and has just broken out, so I think there is more upside here. I’m not selling, at least not yet, and we will sit and wait for the big pop on Wednesday.

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