3SOF

I'm a long term bull on the gold price, and yesterday we've had a breakout to almost 17 year highs:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=5369;image)

This is even more significant if we consider that the USD has been rising against major currencies over the last 6 months or so:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=5370;image)

I say this because gold was being used as an hedge to a falling US dollar. That was one of the principal causes for the rise in gold, analysts said. Well, not anymore. Now gold and the dollar are rising in tandem, and that means gold is rising on its own fundamentals, not because of currency arbitrage. This is signaling inflation on the horizon too.

I wrote about this macro change on GG's thread (my dear GG, why did I sold you?  ::)): the fact that gold is rising without the help of a falling US Dollar is a meaningful fundamental shift and it means gold will move a lot higher from current levels.

So, if gold is rising and that trend will probably continue, we want to look for gold related stocks. There are a number of them that look attractive (GG is the best long term holding if you ask me), but on a shorter term view I find the South African gold companies the most promising.

There was a problem with these stocks, you see, gold is traded in USD, so these companies sell gold for USD. But, their operations are primarily in South Africa, so their costs are in RAND. The South African Rand rose from $14 in 2002 to less than $6 in early 2005 as you can see on the long term chart below:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=5371;image)

The gold price long term rise wasn't enough to compensate for a falling USD. Gold production and sales were up, but revenues weren't, because of this currency issue. In the meantime costs rose, so profits declined and so did the share prices, of course.

But now we have some profound changes in the fundamental picture of these currencies relationships:

1) First of all, gold now is rising in the face of a strengthening dollar. No more currency arbitrage, gold is bullish because of its intrinsic fundamentals.
2) The dollar isn't on a free fall anymore against major currencies of the world, in fact, the USD Index is up in 2005.
3) The Rand is no longer getting stronger and stronger against the dollar and probably the trend has been reversed in 2005 in favor of the dollar.

This means the following for south african gold companies:

1) With gold price up, their proceeds from gold sales will naturally rise.
2) Revenues will rise even more, because they are no longer being eroded by a free falling USD.

So, it is clear we want to buy some South African gold company's shares. I've been looking and the one that suffered the most from this dollar/rand relationship is DROOY. The stock went down from a high of $5.80 in April 2002 to a low of $0.30 in April 2005. Now the long term trend has reversed and yesterday the stock rose 10% on volume above average.

Check the long term chart:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=5372;image)

And the short term chart:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=5373;image)

I'm buying DROOY for the 3 Stocks on Fire Portfolio at today's open.

(This recommendation was made by David Randolph from 3 Stocks on Fire, and he will update this analysis everyday after the close until he sells the stock. The 3 Stocks on Fire Portfolio is up 159% since inception on 28th of April 2005 (http://www.3stocksonfire.org/3stocksonfire.php). 3 Stocks on Fire is a Community of stock traders and investors. Our 3545 members exchange trading ideas and strategies on our message boards everyday. We welcome you as a new member of the 3 Stocks on Fire Community, please take 10 seconds to register (http://www.3stocksonfire.org/trading/index.php?action=register) and receive our free newsletter)

You may want to look at this thread as many of the movers are listed.

http://www.3stocksonfire.org/trading/index.php?topic=2215.new#new

There is a lot of media now on gold so some stocks may be short term extended and others not moved to much yet. Often the tiny ones move last. Gold itself is near the December high so could break out but would be better to consolidate a bit.

Here is the end of gold chart

(http://xs46.xs.to/pics/05375/1509goldeod.jpg)

The 10=min index chart shows negative divergence suggesting a pullback sometime soon but the 60-min chart does not show it yet.


(http://xs46.xs.to/pics/05375/150910mingold.jpg)

This chart is a longer term view of the last 25 years ans you can see if this time gold does break out from this 20-year down trend line then it could lead to a very extended rally lasting  years with many stocks doubling or more.

http://tinyurl.com/ammfy

Something strange happened yesterday....for many years when the US$ rallied the the price of gold in US$ would fall but yesterday the US$ rallied and broke out of its bull flag and gold also went up. It is too early to tell but if gold could actually decouple from the dollar and trade on its own it would be very bullish -- yet to be seen  ((THIS IS AN EDIT- I had not read the full note the David posted I guess and afterwords see that he mentions this also - but I will leave it in as we have the same opinion of this ))

(http://xs46.xs.to/pics/05375/1509usd.jpg)

Note that things look good in gold long term and we will know more after we see how the gold market performs on the first pullback. In the past it has been shown that with gold stocks is is best to not chase them but buy on pullbacks or at break outs.

also watch Palladium as it is perking up - the main plays there are PAL and SWC - the later is at break out now.

Gold is up so far this morning but it is only 06:30 Eastern time.

im in at 1.45  ;D

Just saw this while doing the DD.......

Press Release Source: Schiffrin & Barroway, LLP


CORRECTION: Shareholder Class Action Filed Against DRDGOLD Limited by the Law Firm of Schiffrin & Barroway, LLP
Thursday August 11, 4:55 pm ET


RADNOR, Pa., Aug. 11 /PRNewswire/ -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all securities purchasers of DRDGOLD Ltd. (Nasdaq: DROOY - News; f/k/a Durban Roodepoort Deep, Limited)("DRD" or the "Company") between October 23, 2003 and February 25, 2005, inclusive (the "Class Period").

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Darren J. Check, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [email protected].

The complaint charges DRD, Mark Wellesley-Wood and Ian Louis Murray with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company's South African operations, specifically the North West Operations, were underperforming due to production problems; (2) that the South African Rand was negatively impacting the Company's operations; (3) that due to (1) and (2), DRD materially overstated its net worth by failing to take timely writedowns; (4) that the Company lacked the cash to adequately cover future commitments and continue as a going concern; (5) that defendants' statements about the Company's growth and progress were lacking in any reasonable basis when made.

On February 18, 2005, DRD announced that Company headline loss per share would be more than 200 percent higher than the previous reporting period. Then, on February 24, 2005, DRD released its interim financial results, which revealed that the Company incurred and continued to incur significant losses and that operations were in process of being restructured. On this news, the shares of DRD fell by $0.38 per share, or 25 percent, on February 24, 2005, to close at $1.11 per share.

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com

If you are a member of the class described above, you may, not later than August 12, 2005 move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.


    CONTACT:  Schiffrin & Barroway, LLP
              Marc A. Topaz, Esq.
              Darren J. Check, Esq.
              280 King of Prussia Road
              Radnor, PA 19087
              1-888-299-7706 (toll free) or 1-610-667-7706
              Or by e-mail at [email protected]

I'm in at $1.49 go DROOY ;) :D

anyone got a sell point  ?

I saw the lawsuit as well. It seems that whenever a stock drops precipitously, there will be a lawsuit. Sure, it's important to communicate business difficulties to the shareholders, but it's also a concern that company officers shouldn't say things to send the price down further without good reason.

Their 20-F filing from nov 2004 lists 10 pages (!!!) of risk factors, covering everything from the AIDS epidemic to land claims to aging facilities, they certainly don't seem to be covering anything up.

I'm slightly more concerned about the recent goldminers' strike, coupled with strikes in other industries. Many South African workers are unhappy with what they perceive as a rightward shift in the govt. The government's response has been conciliatory, so things seem to be okay for now, but a long-term hold in South African mining could be subject to unforeseen political events.

But this does seem a low-risk, potentially high reward proposition, I'll certainly have a look at the tape Monday am and probably join in. 

Those lawsuits from shareholders don't concern me at all. In fact, they encourage me to buy the stock. Why? Probably it is trading below fair value because of those lawsuits ... and the lawsuits will lose their strength as the stock rises, so, the more it rises, the better for the company (ain't this always true?).

I'm a very happy holder of DROOY and I'm not stopping here. I see about a dozen of promising gold stocks on my filters, so I need to add more gold related stocks to the 3 Stocks on Fire Portfolio.

I don't think anyone will argue with the fact that DROOY's trend has turned from very bearish to very bullish:

David,

Thanks for DROOY!....This seems like it should really benefit from a bullish Gold market.
By the way, what do you think of GFI??   It is also a South African stock that also has great fundamentals as well as nice technicals.

Quote from: David Randolph on September 18, 2005, 02:24:08 PM
Those lawsuits from shareholders don't concern me at all. In fact, they encourage me to buy the stock. Why? Probably it is trading below fair value because of those lawsuits ... and the lawsuits will lose their strength as the stock rises, so, the more it rises, the better for the company (ain't this always true?).

I'm a very happy holder of DROOY and I'm not stopping here. I see about a dozen of promising gold stocks on my filters, so I need to add more gold related stocks to the 3 Stocks on Fire Portfolio.

I don't think anyone will argue with the fact that DROOY's trend has turned from very bearish to very bullish:

So David, what is your sell target for this South African stock?

More gold seems a good idea,I was very sorry to see GG go, as I've been looking for a proper gold play for a while, but my knowledge of this rather complex sector remains minimal.

Hi,

I, too, agree with David & have a target of $2.25 on DROOY.  I own GG, DROOY, & continue to own the very best gold stock PERIOD, IMO ==>  That is RGLD & there is none better!

good hunting 'cause gold's goin' to $500 by years end, I believe

Willie

Redchipper - on GFI it has done very well and exceeded both short term targets. in an uptrend gold stocks tend to be decent buys near their 9-day EMA. This stock my not get there for a while so may bounce upon filling the first gap near the lower orange dotted line.

It looks now like gold stocks maybe in a multi month rally though at the moment many are short term overbought. Many of the stocks have doubled since May and for those a little consolidation will be good.

There are so many great looking fold/silver stocks now it is important to buy a few to protect from a stock specific problem.


(http://xs47.xs.to/pics/05381/1609gfi.jpg)

Examples are AUY now pulling back with support at 4.20
CAU broke above 3-month trend line on 3-day rally - may be overbought short term
CGR broke out of 6-month trend line - may be overbought short term
GBN  broke out of 6-month trend line - may be overbought short term
GV retraced to 50-day EMA and started back up on Friday

I keep 6-8 during a bull cycle in gold stocks so if one gets hurt do to some company problem  then it does not damage my portfolio

Let's not forget USGL.  I've benefitted from a few very nice runs it's had.  In most recently from 1.50.

Prfsr Hal

I was a little concerned about the action in the stock today.  HOD was 1.66, thenat the close the stock lost all its gains with significant volume.

Not sure if that's a good sign. Anyone else have any input?

Thanks
Saffey.

no input, just loved the 5 day chart on this bad boy, oh and by the way bought at the high of the day, so it did not end to prett'y

Saffey,

you use a signature " Pigs get slaughtered" on your posts - so you know the answer to your question but we will take a look.

DROOY started a downtrend in early 2004 and it went down for 16 months until the uptrend started 4 months ago. Note the degree of slope of the downtrend - it is not drastic but quite normal and consistent and look at the 4-month old uptrend - it is almost exactly the same slope as the downtrend. If it could stay the same for the next 12 months then DROOY would be back to $4 or a 400% gain from its recent $1 price. A 400% gain in a year would be great. But the stock price broek much to far away form the uptrend line so is being pulled back a bit. Pullbacks or time will bring things more into line.

Also note that the stock broke out of the downtrend about 10 days ago at $1.10 and rallied 50% in that short time. Movements like that are not sustainable in the short run so need backing and filling and there is nothing negative about this at all as it is in fact very desirable. The top candle was getting above the top Bollinger band and that cannot last. With gold stocks it is particularly beneficial to buy on weakness as long as the general trend is up.

(http://xs47.xs.to/pics/05382/1909drooy.jpg)


Here is the same chart on a smaller time scale. Note that from the break out and also the break above the the 200-day EMA the stock ran to its first target so a pullback is to be expected. Typically when gold is running the stocks can pullback to the 9-day EMA as this one did 5 days ago - those are good placed to make buys as the risk is low (you can sell soon if they fail) and the gains will be more.

This stock has left a gap which personally I hate unless they were created by some great news. The gap however may not fill but note that the 38% retrace is at $1.35 and gap is at  $1.33 so it may. Also note that the 9-day EMA is conveniently at $1.34.

Another thing to note is that the 200-day EMA is getting closer to crossing below the 50-day EMA which would be very bullish.


(http://xs47.xs.to/pics/05382/1909drooyst.jpg)

As I have shown in other posts, until indicators change it looks very much like gold stocks will now continue their bull market rally for the next several months or so. If true it is a time when you can hold positions for months and if you are a nervous type just not look at them on a daily basis.

Pick several gold and or silver stocks and if long term then make buys at different points so you can add if they pull back. If the longer term indicators for gold reverse then obviously you exit.  If you like to trade then one way of to keep part of your positions long term and trade part. It is called trading around a core.

Gold stocks do not trade like "normal" stocks as they have so many more influences and international events and reasons why they move how they do but the recent break out on the ratio charts and the price of gold and many other factors point to an extended rally at the moment. The one thing which is a bit unusual is as of last week the commercial trades still had rather large short positions and they are generally correct but maybe they are covering on this pullback.

Also note the the two main Palladium stocks also had pullback after break outs SWC especially had a strong reversal.

(http://xs47.xs.to/pics/05382/1909swc.jpg)

I like this stock and sold yesterday as it was way above the top B band and had strong volume after a 2 week run. Will look to buy this one back while watching the price of palladium. The other stock is PAL and its next target and actually its break out will be about $6 and the 200-day EMA

Quote from: saffeysite1 on September 19, 2005, 05:19:13 PM
I was a little concerned about the action in the stock today.  HOD was 1.66, thenat the close the stock lost all its gains with significant volume.

Not sure if that's a good sign. Anyone else have any input?

Thanks
Saffey.

Hi Saffey,

I agree with Metro's assesment. I am long term very bullish on Gold and own a couple of Gold stocks already.

I am going to buy at least one more during the coming weeks. Short term I do however feel that we are heading for a small correction. Several indicators seems to show that we are in overbought territory.

Here is a very useful article about the technical situation: http://futures.fxstreet.com/Futures/content/100300/content.asp?menu=review&dia=2092005

I am not selling but the only Gold stock I would buy right now is RANGE, as this stock short term is not driven by the Gold price.

Great analysis from metro, thanks  :)

I basically agree with him, but I don't feel DROOY or other gold stocks will take much time correcting at this stage. I believe it is riskier to be out than to be in these gold stocks (that is, if you're looking to have above average performance as I do).

DROOY may come down now over the short term, candlesticks do suggest that (but pay attention to the volume, it is very high, the stock is attracting a lot of interest) but it also may push higher again, beyond what everyone is expecting at this point. If the US Dollar starts appreciating as I think it will against the Rand and other currencies, suddenly DROOY should be trading above $5 and not close to $1.5. Gold is moving higher and that trend will probably persist, so there's only way for gold stocks, and that's up !

Of course, as metro accurately said, the stock was up 50% in just 10 trading days, so naturally there was some profit taking yesterday, but I don't think it will last long, a macroeconomic shift has occurred at the gold market and people need to buy gold shares, now !

AUY is an example of one where waiting a bit gives a better tentry price - a nice break out on strong volume and one that looks good long term. But selling some when it was over extended and totally above the top band and buying back near support give 50 cents more eventual profit if it does indeed go back up and it also saves on losses if something unforeseen happens.

This is one I stared buying back today - if I am early I do not care to much as the 9-day is just below that this price is still 65 cents better then the recent high. Also I often do not buy my full amount at one time so can average up or down and it forces me to pay attention to the stock as each stock does have its own trading style.

This note is more for traders rather then folks who like to buy a position and hold it.

(http://img176.imageshack.us/img176/5066/2009auy3oh.jpg)

Hi, David:

  I just made a donation through my PayPal account. Please verify to make sure you do have received it.

I started my summer vacation 10 days ago and will be back on board October 1.

Good service and want to be part of it.

Hopefully just filling the gap.

Good Trading all!

u-

Quote from: shawFund on September 20, 2005, 12:50:09 PM
Hi, David:

  I just made a donation through my PayPal account. Please verify to make sure you do have received it.

I started my summer vacation 10 days ago and will be back on board October 1.

Good service and want to be part of it.

I think so, but I don't know if it was you because I don't know your name and you didn't provide your nickname on 3 SOF. Please send an e-mail to Ramsburg telling your name shawFund. Thank you and you're welcome to 3 SOF Premium Service  :)

Considering DROOY, I must admit I was wrong on the short term and people who patiently waited for a correction were right. The entire gold sector dived yesterday, but DROOY went down the most, almost 9%  ::)

This was probably due to the gains of the South African Rand against the US Dollar, as you can check on the chart below. I would like to see the USD holding the 6.30 level and I believe that's what ultimately happen, since I'm bullish on the USD against other currencies worldwide.

DROOY went down and closed a gap that it left open on the way up. I will continue holding the stock.

Hi Dave,

Any shor term prediction on DROOY?

Thanks.

Considering the volume and the close of the gap I think a short term bottom is in, but I can't be sure about that. I still need to draw an ascending trendline for DROOY, for now the chart is still in the early stages of an ascending phase.

Now that you're talking I do see two ascending trendlines, TL1 and TL2, and TL2 indeed has 3 touches which validate the trendline. The slope is an healthy $0.024.

Good luck :)

Wow, DROOY was up 15% today, so we sure have a valid ascending trendline in place. That's always a good thing, because it makes technical analysis much more simple and clear for everyone to see it.

I find that Gold is the only game in town. I chase performance, I want the 3 Stocks on Fire Portfolio to grow every month, so I will probably need more gold in the portfolio. Other sectors are just bearish now, so everyone will rush to pick some shiny metal  :-*

DROOY is doing just fine, of course I will continue to hold it.

Hi David,

Thanks for your reply. I didn't get the chance to see it in time but I bought anyways. Holding VPHM, AOB, SVA, RITA, HOM, DROOY, and BRVO from 3SF. Your picks are amazing! Thanks again.

Gold seems to be doing well and likely continue to do well. The other game in town is the energy stocks, and I have been holding natural gas stocks CHK and KCS since Katrina and expect them to continuously do well due to Rita and coming heating season.

-Valueseeker

DROOY went down today but I'm not worried. TL2 for tomorrow will be coming at $1.40 for anyone interested in buying at support. I will continue holding DROOY.

The Dollar rose against the Rand on Friday and the cross seems to be developing an inverse H&S pattern, which would mean a medium to long term bottom for the USD versus the South African currency.

Those would be terrific news for DROOY, since the company would be making more money from the rising gold price and also from the rising dollar (revenues in Rands is what matters for DROOY, the stock listed on the Nasdaq generally follows the stock traded on the South African exchange).

Anyway my patience is running low at this moment. I'm quite bearish on the general market and don't want to be overexposed, whatever the sector is. I believe gold stocks will be a safe haven sector and that they will rise over the short term, but the market has to agree with me !

And the market will disagree with my assessment if the stock closes below TL2, which for tomorrow will stand at $1.42. If this situation happens, I'll take a small loss and move on, the first and more important trading rule is to preserve capital.

Another excellent analysis, applaud. Just hoping that 3SF T-shirts include XXL size, for thats mine and most of the average californian trader size [that luv for slammers and fries would add up somewhere  :)]

David,
Did you sell it, as you were saying? ???
Dhiraj

Quote from: dhiraj19 on September 26, 2005, 10:50:30 AM
David,
Did you sell it, as you were saying? ???
Dhiraj

Of course not, read what I say, I only take in consideration signals on close:

QuoteAnd the market will disagree with my assessment if the stock closes below TL2, which for tomorrow will stand at $1.42. If this situation happens, I'll take a small loss and move on, the first and more important trading rule is to preserve capital.

Quoting Master Swing Trader, Alan Farley

=======================================================
The Philadelphia Gold/Silver Index (XAU) rallied to resistance at its 2004 highs this month, while the commodity tagged new highs. This is a bearish divergence because gold stocks should outperform the metal at breakout levels, not underperform it. In other words, the index is still range-bound and not in an active uptrend.

The trouble stems from the silver component of the index, which is still trading well-below historic highs. Unfortunately for the gold bugs, this triggers a second divergence because the metals should move together if this were the start of a secular uptrend. The bottom line: Look for the gold rally to fail soon and take the bugs with it.
========================================================

Today gold stocks outperformed the undrelying metal and it is the sign that GOLD STOCKS are POISED to move much higher.

Goodluck all

I may be off the board for couple of weeks. I wish david and the community goodluck.

Quote from: stocky on September 26, 2005, 02:14:28 PM
I may be off the board for couple of weeks. I wish david and the community goodluck.

Thanks stocky, wish you well too  :D

If DROOY CLOSE >1.43 => HOLD. If not, SELL.

The general market is not nice today, I see a sea of red on my screen

i averaged down today(something I seldom do).

I bought another bunch at 1,37 en hold my fingers crossed. lol.

if it is below 1,43 at 21.55 i will sell it all. (it is no that much so it is very easy to sell, no worries there.)

lets see what happens the next few hours.

gr N

DROOY is quite simply tracking the gold price almost tick for tick, not sure I will sell even at a close below 1.40, there is support at 1.36, i'm not too alarmed if it stays above that, the market speaks

also gold has recovered the last few hours from a massive dip (DROOY didn't follow) so my TL2 is at 1.36.

I've sold DROOY at $1.39 as planned, taking a small loss. I'm having some fundamental doubts against my case for being very bullish on gold, and in doubt, stay out !

I'm still in.

It is not only the gold rise but also the management turnaround that made me buy DROOY.

The turnaround is not yet to be seen in the numbers.

i have my finger on the button. if it goes down today it is gone.

gr N

it hit 1,48 and is indead following Gold.

lets see what this baby wil do. My stop loss is at 1,40(its a mental one).

gr N

Quote from: David Randolph on September 18, 2005, 02:24:08 PM

I don't think anyone will argue with the fact that DROOY's trend has turned from very bearish to very bullish:

very strong words and it should be.. I'm still holding.. TL2 has broken but not the TL1

Hi David,

My two cents...( I'm into gold stocks as an investment & as a trade )

Hold DROOY & hold / accumulate golds such as ABX, GG, GLG, RGLD ( the best one ), CBJ...

Gold has ( for the first time ) broken clear & is rising in the face of a stronger dollar...exceedingly bullish, IMHO...Gold's going to $500+ & soon!  When gold gets to $500, the public will be awakened that something's happening ( by CNBC, etc. ) & they'll jump in to create the final short term mo-mo!  These stocks'll soar & DROOY to at least $2.25 ( probably more in this comin' mo-mo )

my thoughts...

willie

lets hope so willie :)

Having a look at the chart action, while it is a shame that DROOY broke the ascending trendline, do you think the candlestick we saw today was a bullish inverted hammer reversal?

We seem to have a short term support level at just below 1.40, so let's hope it holds.  A gap up tomorrow or a strong white marubozu would confirm the reversal pattern, and hopefully get us back on track.  I'm in from 1.50, so I certainly hope so  :D

And agree with you that DROOY and other gold stocks should keep on marching over the next few months (though I admit I know little about the gold market/gold stocks beyond what I have learned from 3SOF).  I just think it is a shame that David turned bearish on gold so quickly after reiterating his long term bullish sentiment on gold stocks.  Maybe if they prove him wrong, he will come back ;D

Anyway, very interested to find out more about gold stocks/markets from knowledgable traders such as yourself and metro.  Keep up the good work!

the Scotsman

I'm a little concerned that gold has bounced back to previuos weeks highs and DROOY hasn't followed, very very strange

Ji,
Disclosure, long DROOY until $2.25 +, & it'll be this year!

some background - DROOY is the DOG of the golds...They probably couldn't make money if gold goes to $1000...they are a mo-mo trade on euphoria & that is all...The euphoria will come & soon...Gold is going to $500+ & soon...nothing can stop it!...nothing! ( my opinion )

The gold chart says gold is going to $525 & DROOY will participate when the hords of public jump in.

Good fortune to U

willie

wow now there is a contradicting post if i ever saw one, you said ........hey probably couldn't make money if gold goes to $1000...    and yet you own shares...you bought it ??????

starting to sound like a yahoo message board.........sorry if i have offended

Hi,
I own DROOY as a mo-mo stock & not on any fundamentals.  Their break even cost basis is well over $500 gold & is escallating every month.  They are horribly inefficient as gold producers.

But they can be a great mo-mo play on a trade

I often own horrible stocks ( fundamentally ) to take advantage of a mo-mo trade ( technically ).  I see no contradiction here from what I said.

By the way, ABX is probably the best fundamental gold stock with GG second.  I own them too for investment, along with RGLD

willie

Well, we're now ready to launch gold to $500...GLD chart & the triangle breakout adds confirmation to my conclusion.  Power trends building in ABX, GG, GLG...& should build for DROOY, CBJ, etc.

SLW is also a good pure silver play owned ( mostly ) by GG & markets GG's & others silver at a low fixed cost...worth checking out as silver starts it significant rise...

USGL.OB should prove a speculative winner since it is run by GG's prior 'brilliant' CEO

good fortune to all longs in the precious metals & silver

willey ( this time I'm spelling my 'post name' correctly )

Thanks Willy for your insite, I am still holding DROOY 39,000 shrs and watching Gold price, as you say looks very bullish, just emigrated to Thailand last few days got my internet up an running, have hotmail address if you'd like to share a few thoughts, I would be interested in your financial summary of DROOY showing the figures and explanation for your opinion earlier.


have msn email address......not hard to work out :-)

Hi,
Cliff Droke is an expert on DROOY & is one who analyzes gold & gold companies.  Even he has been dismayed at DROOY's inefficiencies.

http://news.moneycentral.msn.com/ticker/sigdev.asp?Symbol=drooy
...worthwhile for research on DROOY

I invest in ABX, GG, GLG, NEM, RGLD

I speculate on DROOY and others for the mo-mo trade coming very-very soon as gold heads up & tops over $500 & the public suddenly discovers it.  That's when I take partial profits in my golds & sell my speculative golds.

Good fortune to U

willey

Is DROOY still a play?....seems to be lagging behind lately.  Should it still participate in rally as gold advances near $500?

On my filtering of the market today I got 3 South African gold companies, they were HMY, GFI and DROOY. They all rose about 5%, but DROOY was the one that rose the most. Also, its market cap is much lower than HMY's or GFI's, because the company has many inefficiencies producing gold.

I think this rally on south African stocks, despite gold's recent weakness, is due to the strength in the USD, particularly against the South African Rand, as you can check on the chart below.

I think DROOY will give a quick 10 to 20% return here. I'll buy it at today's open for the 3 Stocks on Fire Portfolio.

Hi, I don't think that DROOY is a good pick. It is clearly in downtrend as shown in the chart above.

The gold index is also in down trend and may have short term bounce back because its over-sold technical indicators.

Check the three-year gold Index chart below:

I'm not against into 3SOF picks but, I agree with shawfund... i'll pass for now for DROOY ;)

Promising day in South Africa

Quote from: shawFund on November 10, 2005, 10:29:05 AM
Hi, I don't think that DROOY is a good pick. It is clearly in downtrend as shown in the chart above.

The gold index is also in down trend and may have short term bounce back because its over-sold technical indicators.

Thanks for your comments shawFund, I respect them.

DROOY build support at $1.21 (3 touches), and now there's a fight between that support level and the descending trendline. You're right, the stock is still in a descending trend, and probably I should wait for it to break the descending trendline on the upside before I buy.

But, I think I may have some macroeconomic advantage here. Everybody now is thinking gold will go down because of the strength in the US Dollar (and gold indeed went down). But I know that the main problem with DROOY isn't so much the gold price, but the Rand price.

So, people may be selling DROOY because of the fall in the gold price, when they should be buying DROOY because of the fall in the SA Rand (the company has its revenues in USD and costs in Rands, if the USD rises against the Rand, revenues go up and costs go down in USD terms).

I got my fundamental reasoning to guess bulls will win this battle against bears. Bulls will be winners if the stock closes above the descending trendline, which for today stands at $1.36. Bears will win if the stock closes below $1.21.

If bears win I don't have any problem admitting my mistake, taking the small loss I would need to take.

So, the trading plan for DROOY is simple:

Hold the stock unless it is set to close below $1.21.

(Thanks for that nice chart for DROOY trading in South Africa Dwer, that breakout is a good sign  :))

Dave, do you or anyone else have any idea what this guy is talking about? Whatever it is, it sounds good for sure if it's not B.S.

http://www.ttrader.com/mycharts/display.php?p=37197&u=nspolar&a=nspolar\

Dave, I've been quite successfully trading in and out of Drooy since first time you bought. I'm currently a bit too overweight in it right now, actually quite a bit overweight, and meant to lighten some at close, but got tied up with something else. Late on Fridays the price tends to go higher than it should and Monday will likely fall back a bit, at least at the open, IMO. Any idea when earnings come out? THNX

Quote from: David Randolph on November 10, 2005, 07:03:45 AM
I think DROOY will give a quick 10 to 20% return here. I'll buy it at today's open for the 3 Stocks on Fire Portfolio.

Up 9%. Is the man a genious or what???

Hi, I looked at the gold index.

It formed an ascending trendline, KD(18,5) is in oversold, KD(5,3) is in higher-lows.
So, it is short term bullish and may test the year high of 250 again.

All points to a short term bullish.

So,buying DROOY may be a good pick and I will buy it tomorrow but keep a close eye on it.

Quote from: BigSully1 on November 11, 2005, 08:56:35 PM
Dave, do you or anyone else have any idea what this guy is talking about? Whatever it is, it sounds good for sure if it's not B.S.

http://www.ttrader.com/mycharts/display.php?p=37197&u=nspolar&a=nspolar\

Dave, I've been quite successfully trading in and out of Drooy since first time you bought. I'm currently a bit too overweight in it right now, actually quite a bit overweight, and meant to lighten some at close, but got tied up with something else. Late on Fridays the price tends to go higher than it should and Monday will likely fall back a bit, at least at the open, IMO. Any idea when earnings come out? THNX

That man is talking about Elliot Wave theory, which is great to describe charts and the past, but not so good about predicting the future. Anyway, the chart fits the general theory that a wave 3 (the largest of all) is probably unfolding now.

If you are too overweight DROOY probably you should sell some, money management is more important than making a lot of money on a specific trade. Because to get rich you need to pursuit the discipline of always respecting money management rules, a single trade won't make you rich over the long run.

I don't know when earnings will be out  :-\

Quote from: irod on November 11, 2005, 11:27:34 PM

Quote from: David Randolph on November 10, 2005, 07:03:45 AM
I think DROOY will give a quick 10 to 20% return here. I'll buy it at today's open for the 3 Stocks on Fire Portfolio.

Up 9%. Is the man a genious or what???

Lol, usually I'm a bit afraid when someone tells something like this, because when a trader is considered a genius usually he's on the brink of collapse, but thanks irod !

Once I made, what, 100% in a month trading futures for a client of mine, and he was so glad that called me giving congratulations, that I was the best, you know, he was flying. I told him: «calm down, never praise me again, I don't want you calling me stupid when I lose».

As a speculator, one should be always equal. Not very happy when he wins, and not sad when he loses. Always keep emotional balance. You're the same man, either you earned $10,000 or lost $10,000 on that trading day. Your family shouldn't even notice if you win or lost on a given day.

I'm not a genius when I win, and I'm not a moron when I lose. The same man.

DROOY closed right at the resistance level. Bulls didn't win yet. Perhaps there will be some pullback today as BigSully1 says, I don't know.

But I think DROOY will break the ascending trendline on the upside, not $1.21 on the downside. I'm considering taking about a 15% profit on this one if I have the chance. That would be something like $1.50.

Thanks for the insight David ;), you're right. Don't read too much into what I said though, I just get excited when things go good for us. Don't worry, I've been down when you're down and up when you're up. It's all a nice dance-like balance, and the most important thing is how much I've learned here thanks to you and everyone else. Keep up the great work! :)

Thanks a lot irod  :

What a nice white candle DROOY made yesterday, and volume, wow, almost 6 million shares traded. I don't know guys, I've entered this for a quick 10 to 20% profit, but the chart is getting too pretty for me to get out now. Maybe a push to new highs above $1.66? It sure looks like it !

So, I'm not selling anymore at $1.50, instead I'll let the profits run.

Perhaps it is the strength in the US Dollar versus the South African Rand that is helping DROOY, I don't know, but the stock is turning decisively bullish.

I'll continue holding it for the foreseeable future.

On my filter today all I could see was gold, gold, gold  ;D

DROOY took off first than all the others, so she's the leader ! It's amazing how gold rose 10 bucks yesterday with the recent strength in the US Dollar. No reason to sell DROOY here, this advancing phase is just starting, I'll continue holding.

It looks like there was one reason to sell, to take nice short term profits  ???

I first bought DROOY for a quick trade, but as one rule says (no time to look for the number), every trade starts as a short term trade, but good ones are long term.

There were some fundamental shifts that favour DROOY:

1) The US Dollar kept on rising;
2) The Gold Price shot up to new 17 year highs  :o

So, I must conclude yesterday's action on DROOY was just profit taking and higher prices are to be expected. Therefore I'll continue holding DROOY.

I should have kept my initial plan. I could have got a nice 15% profit in just 3 or 4 trading days. Instead I'll take just 9 or 10%, selling DROOY today.

On my initial recommendation post I justified my position with this:

QuoteI think this rally on south African stocks, despite gold's recent weakness, is due to the strength in the USD, particularly against the South African Rand, as you can check on the chart below.

I also said the Rand price is more important than the gold price for DROOY. And the Rand is coming back against the US Dollar, that is, the Dollar is once again losing value against the South African currency.

So I'll take profits in DROOY at today's open.

Can anyone give analysis on DROOY? Today it went up 2.01 and then retraced back to 1.81

- Dhiraj

My correspondence with DROOY's IR.
- Dhiraj

Hi

I cannot answer that, we are in a closed period as the quarter ended 31
December 2005, so we are not allowed to disclose any information
individually.

Kind regards

IDG

-----Original Message-----
From: dhiraj sehgal [mailto:[email protected]]
Sent: 21 January 2006 04:36 PM
To: Ilja.Graulich
Subject: RE: DROOY's last quarter's result

Hi Ilja,

I appreciate your prompt response. May I ask how does the production
numbers
look for last quarter compared to previous quarters? After reading last
published reports, many DRDGOLD mines had many problems in 2005(natural
and
labor). Have we been able to recover from them? Also, what is the
quality of
gold which Drdgold mines produce?

Thanks,
Dhiraj

--- "Ilja.Graulich" <[email protected]>
wrote:

Hi
Our production results for the quarter will be released on 30
January,  financial results for the 6 month to end December will be released on
23 February.

Kind regards

IDG

-----Original Message-----
From: dhiraj sehgal [mailto:[email protected]]

Sent: 21 January 2006 05:29 AM
To: [email protected]
Subject: DROOY's last quarter's result

Dear Ilja,

I am current shareholder of DROOY listed on American stock exchange.
I  would like to know when can we expect the company to release recently
ended quarter's result? As six month ending results were released in
June 2005, is there possibility of full year results release
simultaneously.

Thanks,

Waiting for the reply,

Dhiraj

Consolidating in the range of 1.8 - 2.0
- Dhiraj

still stuck between 1.85 and 1.93... Earning sunday US time...( Monday SA morning 8 am)

Quote from: dhiraj19 on January 20, 2006, 09:36:40 PM
Can anyone give analysis on DROOY? Today it went up 2.01 and then retraced back to 1.81

Dhiraj.

I don't know if you're still interested in DROOY, but I'd say it has a good chance of going up at least 100% by mid-2007.

DROOY showed up as my first Metastock Explorer Wolfe Wave on February 16.  I ignored it because I didn't see how that could be a Wolfe Wave I still don't.

Yesterday morning, I decided to study the chart anyway.  Here's my take:

1. December 29, DROOY not only broke out above a Symmetrical Triangle, putting 1.95 IN PLAY, it also took out a year-long down-sloping neckline of a big Inverse H&S Bottom, putting 3.10 IN PLAY.

2. The 1.95 target MADE on January 20.

3. Recently, DROOY has been re-testing the neckline breakout (red down-sloping line), and has been holding.

Looks good. 

I bought it yesterday at 1.44.

DROOY was at BID 1.48...ASK 1.49 when I started this post.  It's now BID 1.54...ASK 1.55.
That's good.  The print of 1.55 takes out the February 21 high of 1.54.

Good luck if you're still holding DROOY.

Quote from: Melf Elf on March 02, 2006, 02:01:51 PM
The print of 1.55 takes out the February 21 high of 1.54.

Here's the Hourly Chart.  The print of 1.55 gives us a "higher high."

DROOY gapped down at the open, printed a low of 1.50, recovered to make another "higher high" at 1.63, and closed up three cents, at 1.58. 

Considering that gold stocks were mixed today, that was a good effort.  Holding long.

1.21 support held during the March selloff. 

DROOY put in a Bullish Morning Star near there, rallied back to 1.63-1.64 resistance, filled the gap at 1.43-1.44, and now needs to complete the Right Shoulder of an Inverse H&S, then take out the 1.64...1.63...1.62 neckline.

(See March 2 post above for the larger Inverse H&S pattern).

Quote from: Melf Elf on April 06, 2006, 08:50:41 AM
now needs to complete the Right Shoulder of an Inverse H&S, then take out the 1.64...1.63...1.62 neckline.

Just to be obstinate, DROOY has printed only 1.61 so far today, right at the neckline.

;D  >:D

Thiis Inverse H&S on the hourly chart also measures back to the neckline. 

Quote from: Melf Elf on April 06, 2006, 11:07:20 AM
This Inverse H&S on the hourly chart also measures back to the neckline. 

Here's a close-up of  the daily chart, that shows the Inverse H&S on the hourly chart (last post).

On the daily chart, the Head of the Inverse H&S pattern is a "self-contained"  Mini Inverse H&S pattern, if you will.

The neckline has identical data points, at 1.45.  The low was 1.24, so the breakout of that "Mini" H&S put a target of 1.66 IN PLAY.

Math:

1.45 - 1.24 = 0.21 points, added back to 1.45 = Target: 1.66 IN PLAY.

That target only gets us back to the neckline of the larger Inverse H&S pattern, which is where we are now.

I like the fact that after the breakout above 1.45, DROOY went up to the prior highs and formed another data point on the neckline.  It then came back and filled the 1.43-1.44 gap that it left at the breakout above the 1.45 neckline (the April 3 low was 1.43), and it now has come back to the neckline, champing at the bit for the larger Inverse H&S breakout.

EDIT: The current Right Shoulder would have a better look to it if we champ at the bit awhile longer, but I'll take a breakout, if we get it.

;D

TA:
http://www.stockta.com/cgi-bin/analysis.pl?symb=DROOY&num1=3&cobrand=windchart&mode=stock

marketgainer.com: Reporting on DRDGOLD Limited
Thursday , April 06, 2006 13:06 ET

Apr 06, 2006 (M2 PRESSWIRE via COMTEX) -- Market Gainer is quickly emerging as a one stop shop for the elite information regarding small cap opportunities in the Canadian and American exchanges. Today's activity on the Nasdaq has brought DRDGOLD Limited (NASDAQ:DROOY) to the attention of our research team. Visit our website to obtain more information on this company and others like it. Our research team strives to bring undervalued opportunities to the attention of avid traders, in order to create an international community of investors. DRDGOLD Limited operates as a gold mining company. It engages in underground and surface gold mining, including exploration, extraction, processing, and smelting.

DRDGOLD Limited appears to be having a record day, inching up towards its 52 week high, currently trading at $1.58. The market sentiment is up 3%,for this undervalued small cap company. Well over 4.4 million shares changed at the time of publication. One thing to consider is DRDGOLD Limited has not released any sort of corporate development to justify the current levels. This is not to say the adjustment is not relative, it may just be a sign of things to come. Needles to say, MG will keep a close eye on DRDGOLD Limited for the weeks to come.

The information provided is brief and informative and has been brought to you from the Market Gainer research team. This should not be construed as a buy, sell, or hold recommendation.

Thanks for that information, Oliver.  Applause. 

DROOY has been the weak sister in this sector, and it needs all the help it can get.

>:D  ;D  >:D

The Bear Case here is that the January upside breakout above the downsloping neckline (solid green line) only served to form the Head (at 2.02) of a Bearish Inverse H&S (neckline: 1.21 and 1.24).  If that's the case, we're now in the Right Shoulder of a BEARISH H&S pattern.

The Left Shoulder is the high of 1.66, which is a BIG reason that we want to see that get taken out here, and see the stock rally back toward 2.00.

Quote from: Melf Elf on March 02, 2006, 02:01:51 PM
I bought it yesterday at 1.44.

I've been patiently long DROOY for over a month.   :-\

We just filled a gap on April 3 at 1.43, near my entry, and successfully re-tested the breakout above the neckline at 1.45 (see last post). 

I don't see any technical reason to have to go back down there.  The gap-filling, breakout re-testing work is done.   So, if we do go back into the mid-1.40s, I'm not going to like it.

>:(

My stop now is below the low of the Right Shoulder of the Mini Inverse H&S, which was the 1.35 low, on March 29.

Investor Letter (April):
http://www.drdgold.com/Investor_Info/Investor_Briefs/apr06.pdf
March Newsupdate (27 slides):
http://www.drdgold.com/Investor_Info/Presentations/2006/emp_asiaminingcngress_mar06.pdf

Looks like a breakout coming....

Quote from: calven on April 18, 2006, 11:42:58 PM
Looks like a breakout coming....

Calven,

I sure hope so...I'm getting tired, waiting for this dog to break out (we need a face on the toolbar that barks).

Quote from: Melf Elf on March 02, 2006, 02:01:51 PM
I bought it yesterday at 1.44.

I've been patiently long DROOY for over a month. :-\

It's now been seven weeks, and with the POG going gangbusters, still no breakout.  >:(

Quote from: Melf Elf on April 07, 2006, 04:45:26 AM
EDIT: The current Right Shoulder would have a better look to it if we champ at the bit awhile longer, but I'll take a breakout, if we get it.

Two weeks later, the Right Shoulder does have a better look to it, but enough with the champing at the bit, already...it's time to breakout!

:D  >:D

I don't want to see the 1.40s again, but if the POG sells off, that doesn't leave DROOY much room, since it hasn't broken out yet.  I'm raising my stop to 1.49, below Monday's low, just in case this is a Bearish H&S Top, instead of a Bullish Inverse H&S bottom (see my April 7 "Bear Case" post for that scenario, if interested).

Thanks for the post and chart, Calven.  Applause.

Quote from: calven on April 18, 2006, 11:42:58 PM
Looks like a breakout coming....

Calven,

It's trying...just printed 1.65.  ;D

Better than two times average 100 day volume, so far.  Looking good.

Yesterday's Inverse H&S breakout puts Target: 1.96 - 2.00 IN PLAY.

The black down trendline comes in today at about 1.975.  The slope is -0.00068, so it comes down slightly each day.  DROOY could run into resistance at that trendline, just shy of 2.00, and back off some.

On the downside, we could get a neckline re-test in the low 1.60s on profit-taking from yesterday's momo players, but after a breakout of a two-month Inverse H&S pattern, buyers "should" step up on any breakout re-test.  I wouldn't want to see a close back below the breakout, though. 

I'm raising my stop to a close below 1.58, yesterday's low.

As a result of yesterday's breakout, the longer-term picture also has improved.  See next post.

On this weekly Ichimoku Kinko Hyo chart, we can see "at a glance" that everything to the left of the thick vertical black line is resistance from the 1½ year Symmetrical Triangle breakdown.

After that kind of breakdown, a stock needs to "regroup," and build a nice base from which to attack all of that overhead resistance from roughly 2.00 - 4.50.

To the right of the vertical black line, we can "see at a glance" that DROOY has:

1. Built a nice 1½ year base, roughly equal to the width of resistance
2. Broke out in January, 2006
3. Successfully re-tested the breakout, in late March, 2006
4. Bounced off the top of the Kumo (Cloud) on that re-test, on a Bullish Dragonfly Doji
5. Broke out of another Inverse H&S pattern yesterday, basis the daily chart

Quote from: Melf Elf on April 20, 2006, 07:16:19 AM
I'm raising my stop to a close below 1.58, yesterday's low.

DROOY currently is BID 1.57...ASK 1.58.  Bummer.  :(

As much as I liked yesterday's breakout, and as much as I like the chart overall, DROOY has been the weak sister in this sector, so if it closes back below yesterday's neckline breakout, and below yesterday's low of 1.58,  I'm going to take the money, per plan.

Quote from: Melf Elf on March 02, 2006, 02:01:51 PM
I bought it yesterday at 1.44.

Sold DROOY at 1.56.  Gain: 8.3%.

As good as yesterday's breakout looked, that's very disappointing.  It still could rally, but I don't like the fact that buyers didn't step up in the low 1.60s, and that DROOY was set to close (so easily), back below the breakout.