Of course a geopolitical rant is not strictly speaking within the remit of a Spreadbet Magazine blog, but given the way that traders will currently be trying to work out whether the latest dip for Gold and Crude Oil is one to buy into, ditto with commodities stocks, I thus have an excuse!
The first thing to say is what a can of worms the Syria situation is, and what a formidable opponent President Assad is. He is nothing like the pensioner megalomaniacs of the previous generation, but of the same Twitter breed as Obama and Cameron, media and strategically savvy and Western educated. Indeed, with allies in Russia and China he has so far forced the U.S. and UK to back off an attack (no need to have a vote in Parliament to guarantee a no!).
And of course, there has been the “peace in our time” moment with 15 days for Assad to hand over chemical weapons . But what would be the consequences of an attack which Western leaders have been too fearful / cautious to contemplate be?
The Syrian affair has already revealed a lot of things that we would rather not have found out about. The first is that the questionable global policeman routine has resulted in the allies generally intervening when they should not have, and, in sickening contrast (like Zimbabwe) not doing so when they should have. The Syrian situation is to my mind, one example of when they should have gone in. Second, Russia / China are now very definitely in a position of major influence in global politics. In short, they have arrived. Third, the message regarding the chemical weapons handover verges on saying that the problem in Syria is not the thousands dying, but the manner of their death – a very sad state of affairs indeed.
To conclude, I would venture to suggest that we are only at the beginning of A crisis which, as the President of Syria has suggested, could cause the region to “explode”. Hence, Gold up, Crude up and all attendant markets.
Although today’s blog has so far been diverted from individual stocks, it was my intention to take a fresh look at the position of a couple of recent triumphs for bulls of the small cap mining space. This is particularly so given the way that although there would appear to be plenty of brokers / research outfits who seem to magically chase these trending situations after they become popular – quite unlike this publication that puts its mouth and money on the line – they also do not get the technical coverage which those trading these stocks should demand.
In the case of Zanaga Iron Ore (ZIOC) which was covered as a Convici]tion Buy in the last edition of this magazine, what may be key here as we get to the closing stages of the latest part of the rebound, is the way that we have a V shaped flag (something I actually would like to copyright), not only above the 200 day moving average at 18.3p, but also with an unfilled gap to the upside. The floor of the gap is at 22p with the message being that while there is no end of day close back below this the target for the shares could rise towards the March price channel top at 33p.
I end on Avocet Mining (AVM), which, like Zanaga described above, gives you the impression that the low hanging fruit of the move to the upside has been delivered already. Nevertheless, while the retracement here could be all the way back to the July uptrend line / 50 day moving average at 13p, the best way forward here may be to wait on a momentum buy trigger. This would come in the form of an end of day close back above the 10 day moving average now at 19.6p above which the one month target would be towards the 200 day moving average now at 28.5p.
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