Both DML and PDN are acting strong for a continued bounce... I like them both, but took a piece of PDN.TO... I would have prefered an entry below $1.00... Uranium is recieving some noteable press and some of the more solid uranium stocks are cautiously responding north.
Dec 19/2012
DML.TO - The stock is NOT under the influence of fundamental analysis at this time IMOP...... sentiment is the motivating pressure on the price... Quick Chart is showing a bounce.
DML.TO was picked up in one of my divergence scans.
For the last week or so the chart has been shaping up for a bounce...
There appears to be an opportunity to take a position, and that position would be preferably under $1.20 and above $1.10... support in this area $1.05 cents is accompanied by a narrowing of the bollinger... with shorter term support in $1.15 area and the price has now strayed above the 13 day average... closing above the 50 day average... all bullish points!
The price has stayed above the 13 day average but within upper band... this is good... still not overbought!
MACD is under the trigger line (signaling the presence of a downtrend) bouncing from a reading that has produced up moves in the past.... As of this post from Japan there has been a politcal election where there has been some favourable new releases that caused the market to react to uranium and rare earths... if it were not in the last few days of Tax selling... this would be more evident.
Be on the alert for a trend reversal during the Santa Rally or into the January effect.... We could even be looking at it right now.
Remember... (even though bullish)... the MACD is depicting a downtrend because it is under the trigger line... so that means this buying signal is only valid because we are anticipating a reversal off a double bottom pattern... risky but that's the game... we are reading between the lines here. If we follow the application of strategy we should be covering a short.
Take a look at NMX.V a rare earth in this case lithium... notice the top and subsequent bounce at the MACD trigger line.
As for expecting a top... this will occur at the trigger line (resistance) or at a point just above as the MACD averages cross the trigger line if it is in fact a down trend with no hope.... On the other hand... this is where upward trend continuations birth from if it is in fact a reversal. Quite often if the MACD averages have crossed to the upside if a trend is reversing... it will pull back down to the trigger line and bounce... Watch for it! A couple of pops above the trigger line can be fertile hunting grounds with the second being the higher low.
In this case the January effect may provide some power... only 5 days to the last day to tax sell.
There is a lot of shares out there just under 400 million... too many in fact to run the price away in exuberance imop..., so a reasonable chance that the price will fall back over the next couple of days is worth considering waiting for if taking a position... It would be also worth considering that taking a position in this is not a day trade, but the benefits would be that it has bottomed, and could be a worthy long term hold. They also manage Uranium Participation. Hey boys... if your reading this... a forward split would be something to consider... I'd love some shares at .65 cents.
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