GSS - Sector: Basic Materials---Industry: Gold & Silver

[Melf Elf]

Nice rally in the gold stocks today.  A few..

GSS up 7.6%
BGO up9%
GG up 5.1%
MDG up 6%
NEM up 4%

It's taken awhile for GSS to break out of this bullish channel, but it's well above it today.  3.33 is the bigger pattern breakout.

GSS currently is BID 3.25...ASK 3.26

[Melf Elf]

3.33 is the bigger pattern breakout

GSS has printed 3.34, so that's a technical breakout of the bullish patterns that have formed over the last six months (see past charts).  GSS alrealdy is up 10.2% today, so it might have difficulty expanding on the breakout.  I'd like to see it close at this price.

GSS currently is BID 3.32...ASK 3.33

[Michael]

Hi Melf elf

Congrats, we have waited a long time but it seems like the market finally recognise the potential in GSS.

Earnings is out after the close today. From the trading it seems like we might have a small surprise there, but lets see!

[usedcasting]

All golds having a great day. Wonder if its something to do with the Bush administration going back to 30 yr Tbill next year.

[Michael]

Usedcasting,

You are right. It is quite an impressive move by Gold today. It is however nice to see some relative strength.

[Melf Elf]

Hi Melf elf
Earnings is out after the close today. From the trading it seems like we might have a small surprise there, but lets see!

Thanks, Mike, I didn't realize that they report today.  GSS sure is poised to go higher out of the four bullish patterns if the market response to earnings is okay.

[Michael]

Melf elf,

It seems like the earnings will first be signed off later today. Allan Marte is flying to Toronto as we are speaking.

They will apparantly meet or beat the expectations but have a bullish outlook (according to the rumours)

[Michael]

Earnings are out. They beat the revenue forecast but miss the EPS with 1.5 cents.

I have to say that I had hoped they broke even this quarter but when that is said the rest of the earnings release is stellar:

• They finally connect Wassa to the grid in June and the production cost fell from $472 per ounce to $333 this alone should guarantee that next quarter will be profitable.
• The  construction on the Bogoso sulfide expansion project commenced on June 13. When commissioned, the sulfide plant is expected to produce 260,000 to 290,000 ounces of gold per annum at an average cash operating cost of $250 to $270 per ounce.
• They exceeded the revenue forecast with 38%
• They have secured $50 million financing for the Bogoso project by issuing convertible notes, maturing on April 15, 2009, to a private investment fund. The notes were issued at par, bear interest at 6.85% and are convertible to common shares at $4.50 per share. That is a 36% premium compared to yesterdays close!

I am not sure how the market will react to the result. There might be some initial disappointment about the 1.5 cent miss on the forecasted EPS. The report seems however bullish from my perspective. I will buy on any significant weakening of the PPS. Target would be just below $4.5.

I have now added to a number of my position so I will have to sell a few shares today. I haven't made my mind up yet but the following are sacred:

VPHM
RANGE
GSS
DHB (Unless it breaks 4.61, which is my target for the reversal)
NLG.TO
AOB
DNDN
BNT (unless it goes through $17 today)

Mike

[Melf Elf]

I am not sure how the market will react to the result. There might be some initial disappointment about the 1.5 cent miss on the forecasted EPS. The report seems however bullish from my perspective. I will buy on any significant weakening of the PPS. Target would be just below $4.5.

Good read on the market's reaction to earnings, Mike, and thanks for the additional information.  Applause.  There was initial disappointment at the open.  The first few trades  were:

3.17...1800 shares
3.17... 400 shares
3.20....600 shares
3.14....1500 shares

Then the big boys stepped in:

3.26...87,000 shares
3.26...60,400 shares

After trading in the low-to-mid 3.20s all day, there also were some buys at the close:

3.27....8,600 shares
3.29...13,100 shares
3.29...9,900 shares

GSS closed right at the top of the four bullish patterns that have been forming over the past six months, so not a bad reaction at all to the earnings, especially given yesterday's overall down market.

The four bullish patterns measure to about 4.30 on a solid breakout, but that doesn't mean that GSS couldn't go higher, or even muich higher.   

[la-onda]

just Fyi:
08/05/2005 (10:19 ET)  GSS: NBF Keeps @ Sector Perform; Cuts Tgt to $3.25 vs $3.75 - Knobias
08/05/2005 (09:29 ET)    GSS: BMO Nesbitt Cuts to Mkt Perform from Outperform
- Knobias
08/04/2005 (15:00 ET)    GSS: Scotia Cap Cuts to Sector Underperform from Sector Perform - Knobias

[Melf Elf]

just Fyi:
08/05/2005 (10:19 ET)  GSS: NBF Keeps @ Sector Perform; Cuts Tgt to $3.25 vs $3.75 - Knobias
08/05/2005 (09:29 ET)    GSS: BMO Nesbitt Cuts to Mkt Perform from Outperform
- Knobias
08/04/2005 (15:00 ET)    GSS: Scotia Cap Cuts to Sector Underperform from Sector Perform - Knobias

Thanks for that information.  Applause. 

It's always difficult to know how analysts' upgrades and downgrades will affect a stock.  Given that the last of the three downgrades was on Friday morning, GSS hasn't reacted too badly.  It's still at the top of the six-month range, although Friday has the look of a Bearish Hangman.  If so, there should be support starting at 3.07.

It will be interesting to see if the downgrades have a more significant negative effect, or if GSS can breakout, despite them.

[Melf Elf]

Given that the last of the three downgrades was on Friday morning, GSS hasn't reacted too badly.  It's still at the top of the six-month range, although Friday has the look of a Bearish Hangman.  If so, there should be support starting at 3.07.

After the analysts' downgrades, GSS found support at 3.10 and now has broken out of the Four Bullish Patterns on good volume.  GSS currently is up 6%, to 3.42.

[eliteG]

Way to stay with this one MELF (applaud)  a great move today for GSS, showing it wants 4 bad 

[Melf Elf]

...  a great move today for GSS, showing it wants 4 bad 

Thanks, eliteG.  If GSS can't get at least to 4.00 after breaking out of FOUR bullish patterns on 3 times average daily volume, I might totally lose my faith in TA. These false breakouts that I've been playing this summer have been really irritating.   

Nice call on MCD yesterday.  Applause.  By the time I read the folder, it was at 34.50! 

BTW, I forgot to confirm that I got stopped out of the NVEC trade last Friday afternoon for a 1.5% loss on the close below the up trendline.   It looked like the trade was going to work out on the rally to 16.75, but it died at the close.  I've been watching another one that I like as a potential short squeeze: OVEN.  I'll start a folder on that one. Take a look at it, if you're interested.

[Melf Elf]

I've been holding GSS since May.  After the recent breakout of FOUR bullish patterns, I didn't think that there would be any problem getting at least to $4.00.  Think again...I've
got a problem.  lol.

GSS not only has come back inside the pattern, giving us the possiblity of ANOTHER false breakout, it's also threatening to break the up trendline off the May low.  If GSS is set to close below 3.13 today, I'll sell it. 

That would be a shame after these four beautiful bullish patterns looked so promising, but "Don't turn a winner into a loser."