Chart courtesy of Stockcharts

The September $65.00 PUT contracts in Randgold Resources Limited (GOLD) that we purchased on the 11th June 2009 for $5.00 per contract have got off to a good start by gaining 25% to close at $6.30 today. Randgold tumbled yesterday losing 4.60% to close at $67.67.

On the 28th May 2009 we sold our entire holding of Randgold for an average price of $68.69 for a return of 82.44% as the company appeared to be overbought at the time. This stock still looked overbought to us so we sort to capitalize on the situation further via the purchase of PUTS which expire in September.

A correction of around $10.00 should see these options double in price and thats the target we hope to hit. If a 25% profit in a day or so is good enough for you then by all means take it, there is nothing wrong with taking small quick profits along the way.

Now while we are sweating and you are having a little chuckle at our exploits we can tell you right now that we may buy again early next week so watch this space.

Taking a quick look at the above chart we can see what appears to be an aberration in the performance of this particular selection of stocks. If this aberration remains in place then we will lose money on this options trade, however if the profit takers decide to cash up then Randgold could correct quickly.

Gold itself closed at $938.30 registering a fall of $16.20 on the day adding more downward pressure on the precious metal producers.

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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