Gold Paper

I am a CANSLIM investor above all else. But since there are very few market leaders to buy out there I think it is useful to dabble in some other trading methods.

This recent market weakness has highlighted a potentially powerful divergence between the price of gold and the performance of many gold stocks. Here are some of my recent gold buys and the reason why I bought them. Most of these methods were heavily influenced by Tom O'Brien.

First up is Gold Fields (GFI), which was a simple buy-at-support play. Sure the company was hammered by the energy problems of South Africa, but the price held at previous support and offered a low-risk entry. I have a price target of 18 and, depending on volume, I will either sell half the position and let the rest ride or just sell it all.

Next up is Anooraq Resources (ANO). This is an excellent example of a stock coming back and testing the breakout. I owned ANO from 1.00 to 2.10 and was anxious to get back in. I almost bought at around 4.00, but thanks to some advice from Tom O'Brien, I waited for that test. Well I got the test in late January on lower volume and jumped in at $3.37. Nice day today.

I want to also talk about Great Basin Gold (GBN) but due to my obsession with all of the election coverage, I'll talk about it tomorrow.