To be honest, I don't know all that much about mining companies - it's not in my circle of competence. But I think the fundamentals of gold are quite strong, I think the metal's price is bottoming out, and that chart shows that Goldcorp has been oscillating between $45 and $55 all year long, like clock-work. That and it has incredibly strong support at around $43.50.
This makes me think that the odds of Goldcorp going up from the $43.50 range exceed the odds of it going down. And if that's the case then my downside risk is only ~$250 but my likely upside is around $500-$900.
So not only do I believe the odds are on my side that Goldcorp will increase in price from around this level, but the upside is also far greater than the downside.
I'm really tired at the moment so hopefully that makes sense, I basically think it's a statistically intelligent swing trade right now.
Only thing I'm not so sure about is how it will react if the overall market corrects.
cannadian, go check the "What are you buying" thread.
I made five profitable trades on Goldcorp today.
I understand what you are trying to say in regards to your downside risk versus your upside potential, but the problem is: That's a fact.
That fact isn't going to change. That's the way the stock moves/reacts. I just think by placing a stop loss at ~$43, you are shooting yourself in the foot. If you bought at $45, why wouldn't you buy at $43? If you're going to buy at $43, why would you stop loss $43?
If you were concerned about losing funds, you should have put a stop loss maybe $0.50 cents away from your original buy, not $2+.
What happens if Goldcorp dips to $42.85 and then shoots to $49? You will be pissed.
See the image below:
KaeJS Nice work, I guess you have only on set of commissions for all those trades? Other wise the profits are eaten up with comm
Last edited by Betzy; 2012-01-25 at 01:27 PM. Reason: Spelling
Because I flat out don't know anything about the mining industry. Goldcorp has a p/e of about 25, and while I know a decent amount about gold/silver - my knowledge of the miners is zero.
So that being said, Goldcorp isn't actually a company that I'd want to hold long-term, I'm only doing this because I see it as a statistically intelligent swing trade at these levels - and because the stock has worked like clock-work so far.
The reason I would sell at $43 rather than average down is because I'm making this trade based on patterns/technicals rather than fundamentals - if the stock breaches $43 then it is no longer following the pattern (the primary reason I made the trade) as well as if it breaches $43 then it breaches a very strong support level which is quite bearish.
Nice job on the trades today! Especially since you managed to hold onto your original shares and collect the 6% gain as well as grabbing some change here and there
I'm pretty new around here but I liked the talk of goldcorp on Tuesday so I bought in at 44.80. Glad I did because yesterday was a nice surprise gain of me
Any estimates on a good exit point? I know lots of people have been saying 55, I wonder if we will get another dip before going that high.