In the Right Place at the Right Time

Good Morning Readers.

The trick to being successful trading in the stock market is to be in the right sector at the right time. It sounds easy but it isn’t. To paraphrase Gerald Loeb in his book “The Battle for Investment Survival”, it is important to be able to read and understand a company’s balance sheet and it is important to be able to analyze the charts but when it comes right down to it, it’s the man who can tell which way the wind is blowing that separates the men from the boys, the “wheat from the chaff.

In my blog we are always looking for sectors that are ripe for profit. One sector that I have found that suits this bill is precious metals and rare earth elements. Back In January, I recommended to my readers that gold and silver were making a correction and it was a good time to buy the gold and silver ETF’s (GLD and SLV). Those of us that did have seen these two stocks make nice runs up and I recently wrote that I sold half of my position in SLV @ @38.85 and have a tight mental stop under the rest of the position because I felt it was getting overbought. As I have previously shown in my chart of GLD I think that gold still has room to run and would not be surprised to see gold hit $1600.00 by June or July. If you are still able to buy this stock for $9.25 or lower I will be doing so otherwise the risk to reward ratio is not worth it. I have attached the afore mentioned chart for those of you that did not see it before.

Another gold holding that is breaking out is International Tower Hills Mines (THM). THM is a 100% owner of the Livengood Project in Alaska. The Livengood project is in a mining friendly jurisdiction and is near infrastructure. THM recently released a report that they have found higher grade than expected starter pits that could significantly improve the projects economics. This 10+ million ounce deposit has already attracted the attention of several major miners. It is important to note that Kinross (a major gold mining company) owns and operates the Fort Knox Mine. This mine is coming to the end of its life. Since the Fort Knox mine is a mere sixty miles from the Livengood project I can only assume that this would be a prime acquisition for Kinross. A glance at this chart will show that a classic double bottom pattern has been put in and the stock has now broken through the 50 day moving average and seems to be finally breaking out with institutional buying. I will not be surprised to see this stock being acquired soon.

I remain 100% bullish on uranium and nuclear energy. It is important to remember that the production of energy using nuclear power is only forty years old. Many of the nuclear plants are old and use antiquated technology. I did a lot of research on the new reactor technology and was amazed how safe they are. Passive cooing systems, self contained units that are the size of a phone booth, delivered to the site on a flat bed truck, buried in the ground and connected to turbines. The technology is amazing. I can only imagine how safe they will be in 10 - 20 - 30 years from now. Due to the disaster in Japan, today uranium stocks are on sale. I have learned through bitter experiences that fear and panic is a buy signal. Several days ago I bought some more DNN simply because I was aware of the fear in the market.  Fear is human. We are all subject to it. Knowing what to do with that emotion, however, is what separates the men from the boys, the wheat from the chaff. If you are looking for sector to buy into that is in the right place at the right time it is uranium stocks. Three of my favorites are Denison Mines (DNN) @ $2.75 or lower, Uranium Energy (URG) @ $1.60 or lower and Uranerz (URZ) @ $3.50 or lower. This weekend I will work on these stocks and highlight them for you on Monday. Today I suggest that you study and watch these stocks.

As I write this, I think that the market will continue to sell off because with the uncertainty in the world today nobody wants to be long going into this weekend. Right now nuclear energy and uranium stocks are out of favor. You will not miss any substantial move. As my dear friend and mentor Edmund Handwerger taught me, the way to prosper in the market is to “buy straw hats in the winter.” That is why I will remain bullish on nuclear energy and uranium stocks.