Wednesday, November 29, 2006

Another Trade: GG

I went long 400 shares of GG at $29.07. The stock broke out over a 3 month cup and handle pattern and recently crossed over it's 200 day moving average. While I don't like to trade long stocks that have a 200 day MA that is above the 50 day MA, when the 50 day MA is pointing up at a steep level, as GG is, I make an exception to the rule. I also like the fact that the RSI is much stronger now than it was at higher price levels, which makes for a postive divergence.

If you look at today's trades (HAL, GG and short AKAM), it's rather obvious what I am seeing. It seems that money is flowing out of tech and into energy and metals. While it may seem odd that I made a gold play when other metals are outperforming, I am going on the thesis that gold stocks will catch up both to other metals and the underlying commodity itself.

Off Topic:

It's been a while since I posted any songs from my playlist. Here is Fray performing a great acoustic version of "Over My Head" at what looks like a local club.


Anonymous said...

FYI - Your thesis matchs Rev Shark's (of Ream Money) thesis, out of tech into gold/oil/etc. Planning on any tech shorts?


The Market Speculator said...

Hi Bill,
I am watching a number of tech stocks as possible shorts, especially in the internet and semi sectors. I almost went short BRCM today, but decided to wait for more confirmation.