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« HSBC raise forecast for gold to $915! | Main | The US Dollar heads down again! »

Yamana Gold: Take profits on short-term trade.

On the 3rd April 2008 we bought Yamana gold for the purpose of making a short-term trade when we wrote:

“In anticipation of a bounce in the price of gold and a possible short-term rally we decided to BUY Yamana Gold Incorporated today for an average price of $14.43 and we are hereby signalling a BUY on AUY for a short-term trade.”

“We sold 50% of our holdings at $16.50 on the 31st January 2008 and we have now bought back these shares at $14.43.”

We now see this mini rally in Yamana coming to an end so we are closing this trade.

Today we decided to close this trade and sold Yamana gold for $16.00 generating a small profit of 10.88%

The technical indicators have moved to the sell zone as you can see on the chart below:

Yamana chart 23 May 2008

Now compare this chart with the chart of 3rd April when we bought it. The technical indicators have moved from being oversold to being overbought, in our humble opinion.

Yamana Chart 02 April 2008
It should be noted that this profit has been generated over a period of approximately six weeks and helps to add funds to our trading account. Our core position in Yamana remains intact for the long term, when we believe that this gold stock will be a star performer.

We will now watch from the sidelines for the opportunity to repeat this move.

As we see it this sort of trade generates small profits for us when it goes well. On the downside, when it goes badly, we will be left with Yamana’s stock, which is something that we are comfortable with.

If you enjoy the trading side of this gold bull market then be prepared to move quickly to both buy and sell your position. The buy and hold strategy is for your core position which you liquidate when your targets have been hit.

Have a good one.

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Reader Comments (2)

With all due respect, I think you are selling prematurely. The RSI is at almost 63. There's another 10% of meat left on this bone. I hold until the RSI reaches 70, then pull the sell trigger.

May 25, 2008 | Unregistered CommenterJ. Wendell

J, You may well be correct and we hope that you are. We made a call to the best of our ability so there we go. We will watch from the sidelines now. Please let us know when you decide to sell as we always enjoy good news.

May 26, 2008 | Unregistered CommenterGold Prices

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