Monday morning gold and gold stocks are up, then the Swizz central bank pegs their currency to the dying Euro and all of a sudden gold gets taken down $100 in a matter of a day. Wednesday morning the carnage in the gold stocks continued, so while the Talking Heads on TV where talking about the "Risk On" trade and that everyone should be piling into the equities, I was focusing on the "Risk Off" trade and added to my gold mining portfolio.
I really liked the price action on KGN - T Keegan Resources over the last few weeks and have been recommending members add to their current position or start taking a position now if they currently didn't have one. I hope readers took action, did their own due diligence and bought some Keegan (KGN-V, KGN-A) when it was trading below $8.00. We put out a post last week, suggesting KGN was looking to break out soon and take out the $8.00 over-head resistance that has been in place for the last few months and move towards testing the all time highs above $9.25. I have no doubt that we will see that price and probably higher this Sept or early Oct, at this rate of accent the price for KGN can gravitate towards $11 in this same time frame. But for now, we can be assured that we got the timing right on adding KGN to our portfolio this past month, in the past few days KGN has traded past $8.00 and is now at $8.65 (11:45 am) and well on its way to test the all time highs.
Having followed this stock for the last 6 years and we have always held on to a core position in this company throughout the whole time, Why?
Great management, share structure, properties and the experience to take a grass roots project and turn it into potential world class discovery. How long will we hold our core position in Keegan Resources? Always, cause the mine should be in production in a few years and then will turn a good cash flow, if they ever get to that stage. Most likely, Keegan will never get to the production stage because the project will most likely be bought out by an existing producer operating in the area or looking to get mining exposure in Ghana. Keegan Resources KGN is definitely a take out target, its just a matter of when it happens. So sit back, relax and enjoy the ride, because the Golden Train has left the Station and you are all ready on board.
The next few months are going to be a traders delight, with this kind of volatility we can make a killing in the sideways market.
For now the trend in the gold sector is up and breaking out, now is not the time to really be trading too much, sit tight and be right, if you are trading just use a small % of the securities you hold. When the move is done, then the volatile swings will come in a sideways pattern which is easily tradable.