Towards the end of last week, I managed to close my eyes to both the Gold price and Gold mining stocks and noted that the “vampire squid” aka Goldman Sachs for once, correctly recommended to their clients to go short of the metal (I guess they have to get one right some time?!).
As I write, I am limbering up for a 3 minute speech on trading as part of a Traders Session in Saturday’s UK Investor Show at London’s Excel. In 3 short minutes I am supposed to deliver my secrets on how to make millions from the markets. Yeah right! You’d be better to simply read my book at the foot of this piece… My focus in the speech will however be on “Gaps and Traps” (explained further in the book). Unfortunately, my problem will be how to fill out the other 2 minutes, 58 seconds on Saturday as I don’t really want to give away this Holy Grail to all and sundry! Watch this space for the launch of my own Zak Mir’s TA Best Ideas fund under the new Titan banner over the next few months.
On the more serious matter of Oil & Gas explorers. I have a serving of three popular plays, one a blue chip and the other two AIM heroes. Taking BG Group (BG.) first, and I may be the only one left who still hopes against hope on a fundamental basis that someone, anyone might try and takeover the company after its 2013 production forecast fiasco in the autumn. On a technical basis it looks as though we are about to endure the second leg down of the late 2012 decline for the stock . The key issue is what the sell trigger here would be? Should we be short but risk a rebound off the red December support line at 1,110p? I would actually say yes, given the way that all the near term moving averages are currently falling. Indeed, at this stage, only an end of day close back above the blue 50 day moving average at 1,147p really delays the prospect of a sub 1,000p dive for BG in my opinion.
Ironically, one of the biggest problems with the markets – something I might mention in the 2m 58s of free time tomorrow (!), is that the ‘easiest set ups’ should generally be ignored or even traded against (ENRC recent head and shoulders classic notwithstanding). However, I did call Gulf Petroleum (GPX) up from the 80p zone in December as a double bottom rebound with the June bounce, and this week the same call is repeated. This is especially the case as there has been a June RSI support line rebound buy signal from extremely oversold levels near 20 out of 100. This could be more than enough to deliver the kind of recovery towards 120p which was seen in December. The timeframe is by the end of May.
Finally, it is the big one, at least for AIM stocks: Gulf Keystone (GKP). This remains a peculiar situation where there may be great fundamental expectations but where the price action is now particularly insidious. That said, the overall flow for Gulf is within a wide rising trend channel from June 2012 on its daily chart,with its floor at 174p. Aggressive traders would already be long on the price channel rebound of last week. But, perhaps the rest of us may wish to see a little more evidence of recovery. What would help out in this respect is an end of day close back above the initial March 182p support or, if you are very fussy, the blue 50 day moving average at 190p. Either way, given the configuration of the 2012 price channel, the reward on a 2 -3 month timeframe could be as great as the top of an October gap at 230p. But of course, it should be remembered than any sustained price action sub 174p would change the picture here radically and therefore there would be no excuse to remain loyal to the bull argument and 200p plus as a target. Indeed, a sharp drop towards 100p would be certainly on the cards. Trade deftly and tightly on this one!
If you didn’t get to hear my 3 mins at the Investor Show, then download below to hear what the “other 2 58 secs” were all about!!