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« Randgold Resources Limited 82.44% Profit in less than a Year | Main | Portfolio Update 26 May 2009 »

Randgold Resources Limited: Take Profits

Randgold Chart 28 May 2009.JPG

Chart courtesy of Stockcharts

We have decided to sell Randgold Resources Limited (GOLD) tomorrow as in our humble opinion it has ran just little too far ahead of itself. On the 18th of June 2008 we bought Randgold Resources Limited for $37.65. This stock quickly rallied to $55.00 before being caught in the ensuing sector sell off to trade as low as $27.70, Randgold closed at $66.66 yesterday, presenting us with a paper profit of 77%.

Taking a quick look at the chart we can see that Randgold has put in an amazing run but now appears to be overbought. The gap between the price and the 200dma makes us nervous. The technical indicators suggest GOLD is overbought especially the RSI. On the financial side the P/E ratio stands at a whopping 139.13 when some in this sector, such as Yamana Gold (AUY) has a P/E ratio of 16.57.

We still hold Randgold in high regard, however we will take the profit and retire to the sidelines until a suitable re-entry point presents itself somewhere down the line.

Randgold Resources Limited trades on the NASDAQ under the symbol of GOLD and on the London Stock Exchange under the symbol of RRS.

Have a sparkling day.

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