Best Stock Advice
Any information or research provided based on a specific methodology for the stock market is seen as providing advice. Advice can be considered the best stock advice when the provider of this research has a track record of being correct in their forecasts. This forecast can be for specific stocks, the overall stock market index, specific sectors and different time frames. Consistently providing insightful information is seen as having the best stock advice.
Spot Gold Is Going Down, But Attractive
Stock Market Opportunities Are Going up
By Mitchell Clark, B.Comm. for Profit Confidential
The stock market and a number of commodities are in correction and this is no surprise at all. I want to repeat my view that all kinds of solid, growing gold mining companies are becoming very attractively priced right now and, as a sector, it’s worth putting gold stocks on your radar screen.
It’s a bit too early to jump right in with the spot price of gold likely to experience more downside. From a stock market perspective, most gold stocks began pulling back hard in mid-March, affecting even the best stocks within the sector. We’ve got to see the spot price of gold bottom out from its current downtrend and then I think we’ll have another really good entry point for considering new positions.
Investing in gold has always been a risky business, but it’s a worthwhile endeavor if you’re a stock market and commodities speculator. The key, like always, is to get the cycle right—timing in the investment business is everything. Even though the long-term trend might still be intact, the spot price of gold could easily go down to $1,200 or $1,100 an ounce. Why not? Gold has been in a bull market since 2002. The current price action in spot gold is very similar to the correction that occurred 2008/2009 and I wouldn’t be surprised at all if it repeated this trend: correction, recovery, consolidation, and then re-acceleration. It does take time.
Right now, there are large, medium and small producers of gold trading for reasonable prices on the stock market. A lot of these companies have little to no debt and are sitting on large cash hoards, waiting to put that money into new exploration and development. (See Everything Gold Is Turning Into Some Serious Green.) Even though gold stocks aren’t going up right now, it is an exciting time to be in this industry.
Speculating in gold mining stocks is a difficult business. You can find the best growth story out there, but if the spot … Read More
Mining Stocks: Six Potential Moneymaking Picks
By George Leong, B.Comm. for Profit Confidential
We are seeing some calm return to the equity markets after Greece managed to convince its debt holders to take a loss of over $200 billion. The aftermath has hurt gold, as the precious metal has hit a snag; it’s down below $1,700 and looking to a possible retest at $1,600. A break below could send the precious metal down to $1,525.
With the current weakness in gold, I do not feel it is time to dump gold stocks and I believe major price weakness should be viewed as an opportunity to accumulate stocks.
I favor the metal plays and continue to smell opportunities, especially in the mining companies and junior gold miners.
China and India continue to be the world’s top buyers of gold and this is expected to continue. The Chinese have also been buying mining companies around the world in an effort to increase the country’s reserves. This is a reason why I like some of the smaller mining companies, especially those with a massive reserve of proven metals in the ground waiting to be developed and needing a cash rich partner to get the ore out of the ground.
You can buy the major gold players such as Free port-McMoRan Copper & Gold Inc. (NYSE/FCX), Barrick Gold Corporation (NYSE/ABX), and Newmont Mining Corporation (NYSE/NEM), as I discussed in The Gold Stock at the Top of My List, but for an opportunity for some real big gains, you need to own some of the smaller miners.
If you want to play the small mining companies, there are hundreds of plays.
I have listed several small mining companies below that look interesting for the speculative trader. Note that these are not specific recommendations to buy these stocks at the moment; just a list of promising mining companies to look into.
Small-cap gold miner Jaguar Mining Inc. (NYSE/JAG) is an interesting miner. The stock surged in late 2011 on news of a potential $1.0-billion takeover bid from China-based Shandong Gold Group, but the bid never came to fruit… Read More
Stocks at Multi-year Highs, But
Watch for Some Near-term Topping
By George Leong, B.Comm. for Profit Confidential
The DOW broke above 13,000 on February 21 for the first time since May 2008, while 14,000 has not been touched since October 2007. My market view is that the upside break at 13,000 is bullish if it can hold, but the light trading volume suggests a minor bearish divergence between price and volume.
My market view is positive and suggests that more gains may be coming, albeit stocks are technically overbought on the charts and are subject to resistance selling on upward moves.
The market view remains bullish; a golden cross is in effect, with the 50-day moving average (MA) above the 200-day MA. The buying bias continued into the first two weeks of February with technology and small-cap stocks driving the broader market. The NASDAQ is up over 13%, while the Russell 2000 is up nearly 12%, above the 8.52% for the S&P 500 and the 6.36% for the DOW.
Technology has provided some strong leadership to the market, with the NASDAQ eyeing 3,000 and a decade high. My market view is to be careful, as the chart looks overextended in the near term.
The S&P 500 broke above 1,350 on February 8 for the first time since July 2011. My market view is that a sustained break could see a move towards 1,400.
My market view is also that the buying in small-cap stocks suggests continued economy recovery in 2012. So far this year, the housing and manufacturing data are encouraging and point to renewal.
While investor sentiment continues to be bullish and market breadth positive, my market view is that the lack of mass market participation is worrisome and makes stocks vulnerable to downside risk in the event of bad news surfacing in the U.S. and globally.
What concerns me somewhat is the unresponsiveness of stocks despite the approval of the debt swap resolution in Greece by the eurozone and International Monetary Fund that will prevent a default for the troubled debt-laden country. In my market view, the pause suggests th… Read More
Where the Stock Market’s Going:
The Benchmark Stocks That Will Tell Us
By Mitchell Clark, B.Comm. for Profit Confidential
There are a number of benchmark stocks that I follow and, even though I may not own them, these stocks are very good indicators either for a specific industry, the economy in general, or the stock market.
One company that I feel is an important benchmark stock to follow is Automatic Data Processing, Inc. (NASDAQ/ADP). This well-known payroll and human resources outsourcing company provides a great barometer on the Main Street economy and the U.S. employment picture specifically. The stock corrected along with the broader stock market to $45.00 per share in the third quarter of last year, then recovered smartly back above $50.00 per share. Now the stock is trading at approximately $55.00 per share and it recently hit a new 52-week high of $57.10 per share. As a benchmark stock, this performance is telling.
Automatic Data Processing’s quarterly results last year were very solid considering the state of the economy and earnings held up well. Just in the last 30 days, a number of Street analysts increased their earnings estimates for Automatic Data Processing’s next two quarters and its upcoming fiscal year. If a benchmark stock like Automatic Data Processing is trading right near its 52-week high, then, in my mind, it’s one more sign that the U.S. economy is moving in the right direction, albeit slowly.
Another benchmark stock that’s always worth keeping an eye on is IBM Corporation (NYSE/IBM), which has proven to be an outstanding wealth creator on the stock market, especially recently. It truly is impressive to see a $200-billion-dollar company appreciate so much on the stock market. This stock has been going up, virtually in a straight line, since September of 2010. Back then; it was trading around $125.00 a share. Today, the stock is priced right at its all-time record high of $194.00 per share, trading at about 15 times trailing earnings. This to me is impressive. IBM is a be… Read More
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