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

[Melf Elf]

If GSS is set to close below 3.13 today, I'll sell it. 

With ten minutes to close, GSS currently is BID 3.13 - ASK 3.14.  The low of the day is 3.12.

Man, is this irritating. 

I'm using a log chart (below), and I really can't tell if the trendline is 3.12 or 3.13.  On a linear chart, it's way down there at 3.03, but the up trendline wasn't validated on the linear chart.  It was on the log chart.

The 50DMA is at 3.12.

Given how bullish this chart has acted and how long I've held it, I'm going to have to hold GSS if the close is 3.12, the low of the day.  If the close is 3.11, or below, I'm definitely selling.

[Melf Elf]

Last trade was 10,000 shares at 3.14.  It's okay for today, but it sure needs to rally out of here.

[Melf Elf]

Sold GSS at 3.07 when it was apparent that it had opened near its high of the day and that it would close below the green up trendline basis the log chart (first chart below).

Tough decision because GSS hasn't broken the green up trendline basis the linear chart (second chart below), but that trendline wasn't validated.  On the log chart, it was.

Deciding factor in selling: I've held this one since May, and I wanted to preserve some profit and not turn a winner into a loser.

[David Randolph]

I'm buying GSS for the 3 Stocks on Fire Portfolio at today's open. Details at the update after the closing bell.

(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. 3 Stocks on Fire is a Community of stock traders and investors. Our 3630 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 and receive our free newsletter)

[David Randolph]

I bought GSS on a bullish after a gap up and the stock corrected a bit on profit taking. In fact, it came down to make a retest to the broken resistance, now support, at $3.48.

I'm very bullish on gold and will hold GSS through this session whatever happens.

[David Randolph]

The short term technical picture for GSS is bearish. I will hold the stock anyway, because it is still too early to sell (I still don't know if this trade is a winner or a loser) and I'm bullish on the gold sector fundamentals - primarily because of the recent decoupling from the USD.

[David Randolph]

Nice response from GSS to my doubts, a 7.8% rise 

Since gold is the only game in town and I'm playing what else could I do but to continue holding GSS? I will not only hold all my four gold related stocks, I will look to buy some more. I want more gold in my portfolio, the gold market had a very important macro economic shift and the big long term bull market which started in 2001 is starting long wave 3, the longest and biggest of all, according to Elliot.

[David Randolph]

It is still too early to know if these gold sector trades will be profitable or not. I believe they will.

There were reports of some insider buying on GSS which is always a good sign. I will continue holding the stock.

[Amarens]

7,8 steps forward 4,3 steps back. On average that is up 

I'm in there with you David and also have confidence!

Ready for the steps up again!

[David Randolph]

As you can see on the charts above I've been having some problems designing some technical guidelines for GSS. Everyday I show you different lines, and that means the technical picture isn't clear for GSS.

Anyway the short term trend is up without doubt. I will continue monitoring GSS and analyzing it until I find a technical pattern which I can trust.

For now I'll leave you the charts below and say that I will continue holding GSS.

[David Randolph]

Nice move up yesterday, I'll continue holding GSS.

[healey]

Trading has been halted pending this news: Should be good in the mid to longer term

DENVER and VANCOUVER, British Columbia--(BUSINESS WIRE)--Sept. 27, 2005--Golden Star Resources Ltd. (TSX: GSC - News; AMEX: GSS - News; "Golden Star") and St. Jude Resources Ltd. (TSX.V: SJD) ("St. Jude") are pleased to announce that they have signed a pre-merger agreement whereby Golden Star will acquire all of the outstanding shares of St. Jude (the "Transaction") on the basis of 0.72 of a Golden Star common share for every St. Jude common share. The Boards of Directors of both companies have unanimously approved the Transaction, completion of which is conditional on the execution of a definitive agreement, approval of St. Jude shareholders, requisite regulatory and court approvals as well as satisfaction of other customary conditions. The pre-merger agreement provides Golden Star with customary deal protection mechanisms.

The terms of the Transaction imply a purchase price of CDN$3.10 per St. Jude share (based on the closing price of Golden Star on the TSX on September 26, 2005) representing a premium of 38% to the 20-day average closing price of St. Jude common shares on the TSX Venture Exchange. Upon completion of the Transaction, St. Jude shareholders would own approximately 19% of Golden Star on a fully diluted basis. The transaction would be highly accretive to Golden Star's net asset value per share and is expected to be accretive to cash flow per share from 2007.

St. Jude's principal assets are the Hwini-Butre and Benso projects at the southeastern end of the prolific Ashanti gold belt region in Ghana. Together, Hwini-Butre and Benso have total near surface attributable measured and indicated resources of approximately 15.1 million tonnes at an average grade of 2.71 grams per tonne for contained gold of about 1.3 million ounces.(1)

In addition, St. Jude has several other highly prospective advanced exploration projects in Ghana, Burkina Faso and Niger.

Peter Bradford, President and CEO of Golden Star, said: "The acquisition of St. Jude delivers properties in Ghana with high-grade non-refractory gold resources that are within haulage distance to our Wassa gold mine. In assessing development scenarios for these properties, we will consider both stand-alone development options and the opportunity to mine and haul this high-grade material to Wassa, extending the mine life and increasing production at lower cash costs with minimal additional capital investment."

Mr. Bradford continued, "St Jude's properties outside of Ghana also offer Golden Star the opportunity to broaden and diversify its activities in the region, particularly into Burkina Faso where we see a number of exciting opportunities."

Michael A. Terrell, President and CEO of St. Jude, stated: "This transaction delivers an immediate and attractive premium for our shareholders and allows them to participate in the ongoing development and upside of not only St. Jude's quality assets but also Golden Star's existing projects."

The Transaction is expected to be implemented through a court-sanctioned plan of arrangement pursuant to the Canada Business Corporations Act and to close by mid-December. Upon closing of the Transaction, Mr. Terrell will join the Board of Directors of Golden Star.

BMO Nesbitt Burns is acting as financial advisor to Golden Star. Salman Partners and Haywood Securities are acting as joint financial advisors to St. Jude and have provided advice that the consideration offered under the Transaction is fair from a financial point of view to the shareholders of St. Jude.

About Golden Star

Golden Star holds a 90% equity interest in the Bogoso/Prestea and Wassa open-pit gold mines in Ghana. In addition, the Company has an 81% interest in the currently inactive Prestea Underground mine in Ghana, as well as gold exploration interests elsewhere in West Africa and in the Guiana Shield of South America. Before the benefit of this transaction, production is expected to increase to over 500,000 ounces in 2007, compared to expected production of approximately 220,000 ounces in 2005. Golden Star has approximately 143 million common shares outstanding.

[David Randolph]

Thanks for posting the news on GSS healey 

What an awful day for GSS. My bullish case for gold moving forward was seriously affected and  some doubts sparked in the back of my head.

I'm bearish on the general market because the economy and earnings are about to slow and that's not inflationary, that's deflationary !

I don't know, but the fact that Gold rose against a rising dollar might be just the end of the bull market in gold, now that everyone is so bullish.

I don't want to think too much, I'm in doubt, so I should be out. That's what I'm going to do, selling all my gold stocks today.

[trader567]

David:  I didn't think gold would be an underperformer in a deflationary environment, but I did a little searching to make sure.  Hasn't gold tradionally been a "safe haven" during both inflationary and deflationary periods?


I found this at http://www.endeavourfinancial.com/newspopup.php?news_id=5 :

from
A Tarnished Dollar Will Put The Shine On Gold
By Frank Giustra

"Although most people believe gold performs only in an inflationary environment, they might be surprised to learn that 200 years of U.S. history has shown hoarding of gold occurs during deflationary periods when confidence in the credit quality of issuers of currency (whether sovereign or banks) is shaken. Given the current high level of foreign ownership of U.S. assets, if credit quality is called into question there will be immense downward pressure on the dollar as these holders rush for the exits. In this scenario, gold would rise in U.S. dollar terms. In a global deflation environment, which is very possible today, there would be an exodus of all major currencies, with gold being the only beneficiary. "

[David Randolph]

Gold futures are at $518 an ounce this morning. I know GSS was stupid enough to hedge some of its gold production, selling calls and buying puts, but it wasn't all the company's production and  the higher the gold price, the better for the company.

The market cap is $376M, where as for other gold companies almost always it exceeds $1B, even for those that almost don't sell any gold, it's amazing.

Well, I don't know enough to justify this buying of GSS at this moment, but look at this chart:



Notice the huge volume and the long white marubozu. Maybe something is going on behind the scenes that changes the dread fact that GSS isn't rising like everybody else in the gold sector.

I've read on the company's results that gold mining production is increasing. The gold price is also rising as everybody knows. They would have to be too damn stupid not to benefit from these two factors: rising production and rising selling prices.

I don't think they can be that stupid. Now the market is saying they aren't.

So I'll buy GSS at today's open for the 3 Stocks on Fire Portfolio, 6.66% of capital, as always.