Update January 26: The share price of PMV.V crossed my mental stop yesterday so I had to reassess the position. I sold my shares at \$0.56 for a loss of (\$0.56 - \$0.62) * 1000 = \$70 + \$19.90 commission = \$89.90 = 0.9% of account. Gold is falling while USD tanked this week. The lack of volume on today's goldminers rally is also uncharacteristic of the recent uptrend. The long term uptrend of gold and gold miners is unmistakable on both fundamental and technical basis. I am taking a dabble in this junior gold miner as its share price is making a gap fill on a recent breakout (Fig. 1), amongst other things. Intraday chart (Fig. 2) is also showing signs of life at this support level. What's going to happen to gold as it breaks below 1350 (first time since November) from worries about Chinese inflation, which led to strength in USD (on fear of further Chinese tightening) as EURUSD dropped 60 pips in 2 hours. See FT: Fears grow that China is overheating. Couple that with political and economic uncertainty, we have a short term uncertainty in gold's direction. However, all these is in line with the underlying gold-bug case that money is becoming more worthless as governments pump in money to their respective economies. Another point to note is that as the Shanghai Composite and Bombay Stock Exchange (i.e. growth markets) are making 3-month lows in recent weeks, people will start to look for other assets to diversify their wealth. This is all conjectures anyway. I can't predict the future.I am merely placing my bet as the stars seem to have aligned for me to increase the probability of this good reward/risk trade. Mental stop is \$0.55. Hard stop is \$0.48, however, I'll give it some margin and say 0.40 is my stop as liquidity is thin in this junior. Thus, risk is (\$0.62 - \$0.40) * 1000 = \$220 + \$9.95 commission = \$229.95 = 2.4% of account. Note: You might have noticed that my trade log style has changed for 2011. I am trying to jot down my thought process rather than the data analysis and numerical logic to better capture my thinking for the record.
[caption id="" align="aligncenter" width="570" caption="PMI Gold Corp. (PMV.V)"][/caption] [caption id="" align="aligncenter" width="570" caption="PMI Gold Corp. (PMV.V) intraday"]1[/caption]