As you can see from the above chart we acquired the stock of gold producer Randgold Resources Limited for an average price of $37.65 per share on the 16th June 2008, it closed today at $45.30 for a gain of 20.30% in less then a month.
A quick recap of the Randgold’s progress shows us that our purchase is going well so far which is a pleasing start for those of us who bagged a few. The chart shows us that Randgold has moved up rapidly in a short period of time and now appears to be taking a breather. It could also be the subject of some profit taking by investors wishing to lock in their short-term profits. Nevertheless, the stock price is close to the 200dma and may well come to rest there before the next advance.
The chart below serves as a reminder of how important timing is. As you can see the stock price had experienced a double top before deteriorating to brake through the 200dma heading south. The technical indicators were also on the floor so we figured that the downside was limited and decided to pounce. It is early days yet but this is a quality gold producer, which we acquired at a good time. Should the stock continue to drop we will once again consider increasing our exposure to it either through the purchase of more stock or a possible foray into the ‘options’ arena as we did with the Kinross Gold Corporation.
Any purchases made on dips this summer should put a smile on your face come the end of the year rally which should be in top gear!
Have a good one.
Randgold Resources Limited trades on the London Stock Exchange under the symbol of RRS and on the NASDAQ under the symbol of GOLD.
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