Technical analysis is not only used for short term trading
Laurent-Patrick Gally joins us to discuss how he uses technical analysis when investing in gold stocks as well as other resource stocks. TA can be very useful for investing and not just “trading”.
Click download link to listen on this device: Download Show
Best to you as well Shad – hope you’re doing fine.
LPG
That was a great interview guys. Thanks for taking the time to put it together.
Cory – very good thoughts on challenges in investing in explorers without present production/cash flow. Another good point raised was how an investors approach an individual mining stock (which may or may not move on improving metals prices) versus investing in the metal itself or using an ETF that covers an entire sector and reduces individual risks and exposure. All of these are great points to consider.
I always space out my investing capital between individual stock and ETFs for just these reasons. Some stocks I watch closely for individual reasons, but sometimes I just pick the ETF to spread the risk over a sector in case a company does make a bad call. The Rubicon example LPG mentioned was a good illustration, as it is also included in ETFs. There will always be the most upside or downside with a single stock, but this carries the most risk as well (win big/ lose big), but there different strategies to reduce risk like technical analysis, options, stop loss orders, etc….
Good thoughts guys.
Very nice assessment, esp with relation to RBY!
Listing to the interview, I picked up on something which I said that was wrong.
I mentioned at 10mn50sec that I use Interactive Brokers, which gives me exposure to “North American markets, both US and Germany”. Here I meant “North American markets, both US and CANADA” – thus far, as we all know, Germany is not in N. America. 🙂
Sure that was obvious, but I just wanted to clarify that point.
Best to all, and GL investing/trading.
LPG
Man, I pulled up Google Earth and you’re right. Germany is not in N. America. 🙂
What an amazingly astute observation, E
Ha! Hope all is going well Big Al. I know you’ve had a full plate lately, but at least you had both Cory and Chris Temple at the New Orleans show doing some great interviews.
Best to you and Kathy!
Thanks for bringing up my question.
You are most welcome Nic’.
With Interactive Brokers, via a single platform, you’ll be able to trade equities and options in N.America. If you require, you’ll also be able to trade stocks in Europe.
What I mentioned in the very last seconds of the interview – and which is not audible – is that I am NOT affiliated w. Interactive Brokers in any manner – ie I have no financial incentive in mentioning them.
Best to you,
LPG
Thanks LPG
Our pleasure Nic
For what it’s worth, I’ve been using Interactive Brokers for more than eight years now and like the platform very much.
Well, at least we are all on the Northern hemisphere. So to get to North America you just travel straight and don’t have to take any diagonals.
Also You don’t have to worry too much about Your clothes because the seasons are the same. 🙂
Best Regards
Nic’
Not all of us are in the Northern Hemisphere…..not all the time anyway. Which reminds me, I need a new sun hat and some quality SPF to keep the heat rays off my thin skin.
A. L….I thought your feathers would give you enough protection……..Just kidding.
You would think so but I am so white that just the reflection off a pyramid is enough to burn me up.
Your technicals helped you show something was wrong with Rubicon because the price wasn’t going up. That would mean that everyone else knew the same thing because the technicals are directed by buying and selling. So how did everyone else know something was wrong?
PeachPounder,
What I mentioned was that I found odd that RBY share price was not going up despite the sector broadly being up AND also due to the fact that RBY should have had more reasons to go up GIVEN THAT the company had just become a producer and hence had cash flow.
To answer your question:
Maybe some well informed people in the market knew that something wrong was going on at the production site?
And maybe these people had shares?
And maybe they knew that given the technical difficulties they would have to stop certain activities soon… so their shares would likely take a beating….?
So maybe they sold their shares first before the beating ?
Maybe ???
I’m a simple man. So whatever the reason… it’s irrelevant.
I looked at the chart, and I knew something was “off” with the company.
Only mistake I did was to not reduce my exposure at that time – but I was not heavy on the name in terms of allocation, and was only 1/4 size, so I didn’t really have a red flag popping up in my head. It happens. No big deal (damage) in the grand scheme of things for me.
GL to you,
LPG
+1
TA is better than fundamental analysis (most of the time) because the charts are formed by ALL the fundamental drivers not just the ones you know about.
Market was closed today in japan……no wonder the break down in gold.
“The illusion of randomness gradually disappears as the skill in chart reading improves.” – John Murphy
Mr. Murphy is absolutely right. When I look at my failures with the objectivity that only hindsight can provide, it is crystal clear that I was almost always to blame, not the charts.
The weekly chart of gold going into 2013 provides a great example. Few were on the right side of that move even though the chart had clearly turned ugly.
I was on the right side. Maybe you recall it.
You fought me every step of the way and kept insisting on gold’s bullish outlook.
And NOW you admit you were mistaken after all this time.
Maybe apologize while you are in the mood.
LOL! You are wrong at every major AND minor turn Birdy!
You have GOT to be kidding me! There are hundreds (if not thousands) of posts on this site that prove you have no freaking idea what you are talking about when it comes to either gold or silver.
You have been wrong, wrong, wrong since the very first day I read one of your bullish remarks. Your agenda is too obvious. It is so bad that every one of your followers from the past have departed the K-Report and no longer even post.
Their losses were that bad from your advice.
Even Nurses go bankrupt because of the stuff you pump out.
Your problem is that you don’t ask questions when you are unclear on what is being said. Your ego forces you to put words in people’s mouths instead.
It’s a volatile sector as LPG stated; so there’s been a lot of trading opportunities.
Like this small example:
http://schrts.co/NIXkTC
Or this:
http://schrts.co/ub5T33
You can cherry pick any great trade with 20/20 hindsight.
Maybe I will link some of the worst declines since 2011 just for fun…..oh wait….all of its bad so need to bother. Just look at the HUI or GDX or GDXJ for a little insight into the truth.
Oh dear! …..80%, 85%…90%…95% declines!
Keep leading them down the garden path buddy. I don’t know what you get out of seeing other people lose money on trades gone bad. I really don’t. But you clearly have an agenda because you always pick out little rays of sunshine on even the worst days of declines.
Its another buying opportunity! Right?
Don’t forget the countless selling opportunities that tend to follow all those buying opportunities. You seem to do that a lot.
TED BUTLER observation of OCT 20 CFTC REPORT
Indicated 8 or less traders, held a net short position on comex silver futures of nearly
424 million ozs. or 50% of the annual mine production.
and 60% of all net comex positions . What is remarkable the next closes comparison is crude oil at 3%, NO other commodity comes close to CONSENTRATED SHORTS
Very nice refresh for a non-professional investor. Sure are a couple really highlights there. One – do not fall in love with a company.
The Rubicon example is a classic of how a very simple understanding of Technicals can help out even the most non-pro investor. Daily occurrence where the technical foretell an imminent event (positive and negative).
I disagree and i’m getting tired of people proclaiming that TA can predict an fundamental event. The Rubicon story, if you have been following it, was all about fundamentals -or more precisely when the company was going to RESET. TA did not predict that the company would lay off 87% of the employees, etc. The only question is? Did you buy any shares below $0.15?
Brian,
If you ever heard on Kereport ” people proclaiming that TA can predict an fundamental event” then we are definitely not hearing the same thing…
Granted, I’ve listened to music too loud for too long in my youth… but I don’t think to such an extent that I have ever heard such things on Kereport…
Now, to answer your question, FWIW, no I didn’t buy RBY<0.15. If you did, good for you !
On another matter, I had never heard about the fact that a company that
* had de-risked a project,
* had built a mine,
* was likely to be profitable even w. gold @ $1,000,
* had started producing gold and was hence starting generating cash flow
was going to "RESET", and it was "all about fundamentals".
I have to admit, IMHO, that's an "interesting" concept you have here.
To finish, sorry you're "getting tired": it happens.
I suspect a good sleep tonight and normally you'll be back in shape tomorrow ! Said it differently, based on physiological fundamentals, that is going be a RESET.
GL to you,
LPG
Nah …I’m a bit cranky, so I’ll just take a break from this day-to-day (minute-by-minute) stuff on KER
We are branching and which, quite frankly, I support
Brian, using the slow stochastics alone (JJ’s favorite, I think) would have protected an active trader before each plunge.
Remember that there are always insiders and/or very good analysts who know things before the rest of the market does. The charts are just as influenced by their actions as anybody’s.
http://schrts.co/sz75AZ
Bang on Matthew. I no nothing of slow stochastics but your comments re insiders and analysts is 100% correct and often you can the good and bad news coming if you are paying attention closely enough (whether you are using TA or not). Following a companies activity closely including the houses trading, volume fluctuations, level 2 activity and trending in price and soon you become an expert and your attention to detail will lead you to some often accurate predictions. A form of TA but not articulated as a specific technique.
“you can predict” is what I meant to say not “you can the good….”
BITCOIN HIT……DOWN $50 IN one hour……….zerohedge.( do not look A, no info here)
I noticed that Frank, I posted people seemed to be choosing bitcoin over gold, then bitcoin got “hit”.
Odd, makes ya kinda go hmmmmm.
yes, it does……………..
Great interview with LPG.
I have a daily gold chart that has the autumn uptrend still intact, UNTIL TODAY. The worst price I can get by drawing a trendline on the chart is $1117 and gold is been below that today. The support line that I would have preferred to have held would have been either at $1124 or $1128. So gold today went below the worst last chance support line for its uptrend since July, whether you draw it on a log chart or a linear chart.
Actually as I write it has just made it back to $1117.20 but the low today was $1113.10 according to Kitco
What are actually the fundamentals for Rubicon minerals?
The published fundamentals don’t seem bad to me (huge assets, solme cash, great location, high grade mineralization…I think). Unfortunately the geology team screwed up the modeling big time and what the thought they were going to encounter is not what they are encountering. Few issues are bigger than this as it puts the entire project at risk. Good news is, low debt and massive assets (that can be sold) and there is a deposit there in some form or another. My guess is this will be turned around but the story wont be as rosey and they will have to give up a chunk of the project in one form or another (JV or dilution) before it is figured out.
Peter R,
I’d suggest reading Brent Cook’s analysis of Rubicon from a few weeks back,
Quote…..
“Summary
If the resource is wrong and the costs wrong, then the valuation presented in the PEA must be wrong. Cash flow problems, debt problems, and production problems on a deposit of dubious resources, questionable costs, plus a new guy in charge don’t add up to a screaming buy. Someone’s mom is going to be very disappointed as this slow motion calamity unfolds—or maybe it all works out just fine.”
Full report from Brent is available here.
http://incakolanews.blogspot.co.nz/2015/10/brent-cooks-analysis-of-rubicon.html
Cheers.
Thanks Skeeta – appreciated the link.
Best to you,
LPG
Then the question is : has the valuation of this stock fallen so low that one should hold on for the long term or are the fundamentals of this stock so screwed up that one should still sell, even at this low valuation?
Like I said, there are some good fundmentals unaffected by the miss on geology. They have cash and they have huge assets (ie a brand spanking new mine in the biggest mining district in Canada).
The geology will get figured out but it wont be as economic as first attempt.
Brent Cook is a tool. He either doesn’t have a clue about the company he is speaking about or he is pumping or dumping on a company for personal gain. In this case I guarantee he is backing up the truck.
Not to mention they have some backers that are not prepared to let this fail so easily including the Canada Pension fund (I think), Royal Gold, Franco Nev. Again, a solid fundamental fact. I am not investing in Rubicon but would definitely consider it if there weren’t a dozen other companies I like more with less risk. Gotta love these times to invest. By the way, if you haven’t yet you should take another look at v.fmg. It is now showing signs of breaking out significantly.
Good link to Brent Cooks thoughts Skeeta. Thanks!
GLD breakout and backtest of bullish falling wedge:
http://schrts.co/bD5dS2
(Green wedge is based on closing prices.)
Good thoughts as per usual LPG on both the shorter term and longer term approaches to trading and investing.
Best to you amigo!