Wednesday, December 19, 2007

Coeur D Alene Mines (CDE)

A review of some of the Gold stocks I follow saw an interesting opportunity in Couer D Alene Mines Corp (CDE). There is a strong confluence of support marked by the 50-day MA, and the lows of the large white candlestick from early November, created by a Bear Stearns analyst comment that the stock was underpriced, helped later by JP Morgan's upgrade. Given the stock is trading near the price prior to these announcements should be of interest to buyers. Earlier tests of the 50-day MA since October have seen buyers step in - so now shouldn't be any different. The Base metal is making a similar test of its 50-day MA support. The "Golden Cross" between the 50-day and 200-day MAs is a long term bullish signal.

Technicals could be better; a mild distribution trend in on-balance-volume isn't helped by the scrappy action in the MACD, or Directional Index. But at least the MACD is holding above its bullish zero line.

The point-n-figure has an interesting chart showing a November 6th double top breakout in play, with a chart target of $7.75:

For those looking to use some leverage; January 2009 $2.50 calls trade at $2.05 from the ask, with $5.00 strike calls at $0.90. Short term traders might find some attraction in the $2.50 calls expiring Friday at $1.65 from the Ask.