Saturday, June 19, 2010

Playing with Fire

As best I can tell, buying any one of these stocks first thing Monday morning would be like playing with fire.

Apollo Gold (AGT) is severely overbought and a hot potato I am holding with a quick 10% gain.  This gain has the potential to evaporate very quickly.

I have added a Bollinger Band (50,2) to the True Strength Index on each hourly chart to illustrate the degree to which the TSI indicator is stretched.
Click on any chart to ENLARGE

This is Endeavor Silver (EXK).  I will be intrigued to see how its price performs this week.

Endeavor's projected earnings for 2010 and 2011 have been heading lower in recent weeks, but are still, by any standard, very compelling.  See my page about mining stocks with explosive projected earnings for more details.                                              
And Jaguar Mining (JAG).

While each of these three stocks exhibit TSI readings in the nose bleed area, it is important to acknowledge that price can indeed continue even higher as the TSI will diverge (make lower highs) from here on out.  If this happens, one can expect a future day when hell is payed for this exceptional performance.  ie. stock will be sharply corrected.

Jaguar, btw, has explosive projected earnings per share.  
.17 2009,  .33 2010E,  .87 2011E  AND the float is quite small at 84M.        

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