CCO , Cameco update

Hamilton

CCo may 2011 big cco may 2011

Cameco is performing in a text-book manner with each and every wiggle conforming to EW rules and guidelines. Here is a refresher. The stock did an A-B-C counter-trend rally after the lows of Oct 2008 at roughly $15. This may only be part of a much bigger correction, we simple do not know. But the stock will have gone down in 5-waves from the $44 high and should therefore rebound perhaps by one half of the drop, about $10 to $11 depending how low we go. Today we are on the big fat line connecting the lows and that may hold were it not that the pattern is not (yet) complete. A minor 4th and 5th wave (of 5 ) still seem to be needed which could take the stock to the $22 level. This is the extreme so it might be smart to buy a little above that. The gap-in-the-middle-theory would suggest $24 as ideal.

The target is at least at $32 which is where the gap starts closing and where there is a triangle wave 4 (of 3), both “normal” targets. Even at today’s price that would be a nice return, assuming this is correct.

K , K wt C update

Hamilton

kmay2011 kwtcmay2011

See earlier blogs. Kinross keeeps dropping  nicely and could, arguable, be completing the complete pattern. Do not buy the stock , buy the warrant instead. The stock could reach the $13 level, perhaps, but in this market stocks tend not to reach the bottom all that easily. For the warrants this matters very little as most of the value is time value which does not erode that fast anymore. Under $1 the warrants present a reasonable gamble on this stock.

G WT G, more on warrants.

Hamilton

On Jan 28 we recommended buying these warrants when they were trading at about $1.62. Our hope was that they would perhaps drop to $1, either way they should triple in value after that and of course, if you miss it all together nothing is lost other than an opportunity. Here is the chart , after the fact.

gwg may 2011

They way to do this, in my opinion, is to put in the order in advance. Suppose you bought that day at $2 in the expectation of tripling your money, you would put in the sell order at $6as soon as you are filled on the purchase. The simple reason for this is that these warrants are essentially derivatives and consequently can decay rapidly if near their expiry date or their strike price. Always settle for what you can reasonable get. For the Kinross warrants that would be about $3 if you buy at $1 or below.