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« Why I Hope Gold Falls to $1,000 | Main | Agnico-Eagle Mines Limited in the Buy Zone »
Monday
Jan252010

Agnico-Eagle Mines Limited: Bought Today

AEM Chart 26 January 2010.JPG

On the 25th January 2010 we signaled our intention to acquire more of this stock and some Call Options when we posted an article entitled Agnico-Eagle Mines Limited (AEM) in the Buy Zone.

Today we purchased more stock at an average price of $53.24 and we also acquired a few Call Options and they are the MAY 2010 series at a strike price of $60.00, symbol AEMEL for which we paid a price of $2.85 per contract.

If you pop back to early December 2009 these very same contracts were trading at $12.00 plus so they have dropped significantly since then. Lets hope that they can bounce back to a profitable level and quickly.

Agnico-Eagle Mines Limited opened the day in positive territory so we waited until around 2.00pm EST before making a move by which time the stock had touched $53.00 and gold appeared to have steadied. Our order was filled at the slightly higher level of $53.24, but we are happy to buy them at this level as we do expect them to trade much higher. If a bounce in the stock price comes soon then we may treat this purchase as a short term trade and take a profit, otherwise we are content to hold as this is a quality stock.

As for the Call Options we have chosen the May Series which allows a little time for gold to improve and hopefully Agnico will improve with it. Should we be fortunate enough to register a reasonable profit then we will either take some profits and/or place a stop in an attempt to lock in any profits should the stock price fall.

Good luck with them if you do follow us on this one and remember not to hit any one trade too hard, live to fight another day etc.


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Reader Comments (6)

I've been watching AEM Calls for some time, as well, along with Goldcorp, Barrick and Silver Wheaton, looking for an entry.
Had a good run with Ford (307%), RIM (50%), Eldorado Gold (53%) and Manulife Financial (100%) calls, bought in mid to late December and sold within 2-4 weeks (lucky on the calls, but studied them for 6 months before entering). I've found the best thing to do is place a stop loss right after buying, at a level I am comfortable with - say 30-40% below the cost - due to volatility in option trading...then to absolutely move that loss up, if/when the call moves up - for protection purposes.
Looking at AEM $70 May calls trading ~ $1.00...Will post which trades entered.
Good luck with your trade.

January 26, 2010 | Unregistered CommenterMark

Well done Mark, your patience paid off, pls keep us in the loop on your next move, the more information everyone has the better in our humble opinion.

January 26, 2010 | Unregistered CommenterGold Prices

Good luck. I think you just bought into the end of the  first phase of an ongoing multi-month correction....unless you are planning to trade it, since we could (optimistically) be entering a sustained trading range prior to the next move up. I am utterly unpersuaded that inflationary forces will prevail over the deflationary pressures any time soon. Eventually, yes, but I am betting not for a couple of years...

January 26, 2010 | Unregistered CommenterS

Its not just an inflationary/deflationary play, this trade takes into account the current position of the stock from a chartist point of view. We interpret the chart as being oversold and are trying to position ourselves to take advantage of what we think is an aberration.

January 26, 2010 | Unregistered CommenterGold Prices

Uncharted waters! Watch as we see the sheople herd into deflationary investments;USD,TLT etc; From the bear run up since march. And then back to inflationary ones. I say we are seeing our last hurragh and down we go. Purchasing DJX Sept. puts @ 7,000. When we hit bottom like the final knock out in round 12; then it is time to buy along with the Chinese who have the money to support gold. Who have the money to support there economy. Who have all your money dear Wallmart shoppers. As for short term options now? I say we are going fast to a brick wall and now is time for put plays. Double tops in AEM anyone? Broken trend? Bad news lately? Obama will try to win the hearts of many in November. The average down deals will come for the long term investor soon.. Gut instincts anyone? Consider the possibilities. What are the chances of things improving and what are the chances of this going into the crapper? Macro.
Just another Gold Bull!

January 26, 2010 | Unregistered CommenterRick Nielsen

The crapper is ahead on points...

January 27, 2010 | Unregistered CommenterGold Prices

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