Afew thoughts on some select stocks and investment themes.
For now markets remain choppy at best:
- I still don’t see enough constructive set-ups to warrant going long aggressively.
- The gold and silver mining stocks are not acting well. Most of them have built huge overhead resistance. On a positive note: KGC – Kinross Gold is an example for a senior miner that doesn’t want to go down anymore. In plain English: There are not many left willing to sell the stock. All the bad news you can think of has been published. Overall this makes me think we are witnessing a turn around in that sector.
- Junior miners: I would avoid buying ‘bargains’ trading near their all time lows. Tax loss selling season is not over yet. The biggest losers will most likely continue to underperform until year end. Some will experience an additional 20% drop seemingly coming out of nowhere. If you must buy all time low stocks wait until panic selling hits before you even think of buying. Huge underperformers that come to mind: LSG – Lakeshore and KAM.V – Kaminak Gold.
- Possible investment themes worth monitoring: I still think everything agriculture and food related will be interesting for years to come. INGR – Ingredion and LNN – Lindsay Manufacturing are two large cap plays that come to mind. For those who can buy stocks listed in Germany Suedzucker is a way to play the Ag/Food theme (I have a position in that one). STZ – Constellation Brands would be another strong stock trading near its all time high fitting that theme.
- Royalty plays: FNV – Franco Nevada is the one to watch. It is trading near its all time high and it has the smoothest trading personality of all royalty plays. A break out to new all time highs should coincide with gold and silver starting a new directional move to the upside.
- Gold: Still the best insurance and wealth preservation play I can come up with. As outlined in my latest audio buying once the 175 -180 level with GLD is taken out would be one way to play that theme and at the same time have short term buying pressure / momentum working in your favour.
I’ve abandoned free market principles to save the free market system. – George W. Bush