Riding The Gravy Train: June 2007

Riding The Gravy Train

Beating the market is fun and profitable. This is how we do it.

Wednesday, June 27, 2007

selling MGA -9%, QTA +108%, TUE +4%, TVC +73%

Mega Uranium, MGA, closed below what we hoped would be support at $5.50 and accordingly we sell for an average loss of 9% on our two open positions. We remain bullish of Mega's prospects, however we no longer wish to hold it until markets and its trend settle. The stock price failed its trend line below $6 and rather than sell we waited in the hopes it would find a footing at levels which had offered support in the past, but currently the stock is not proving resilient against continued selling so we step aside.

Quaterra Resources, QTA, is +108% for us and we feel it is time to realize those gains.

Titan Uranium, TUE, is +4% and we do not wish to risk this modest gain turning into a loss as we believe the current trend suggests will occur if we hold.

Tournigan Gold, TVC, offers us a 73% gain which we now book. It appears to be heading for its support in the low $3 range, and we may bid there to replace our shares.

Through much of the coming month we will be travelling to visit remote sites and may not be able to post updates during that time. As always, be vigilant and adhere to stops in order to preserve profits and capital. Markets are treacherous. Be true to your trading plan.


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Wednesday, June 20, 2007

adding FRP, buying SU

Suncor Energy, ticker symbol SU in Canada and the US

If, like us, you believe in the long-term scarcity of oil, increasing depletion of current reserves and the diminishing frequency of significant new discoveries along with global increases in demand, then Suncor appears to be a smart buy. We have been long-term holders of this stock, and note that it has challenged the $100 level recently as part of a familiar pattern that we believe indicates that the share price will soon rise above that $100 level and realize it as a new support price.

In hopes of this we buy Suncor, ticker SU in both Canada and the US, at $95 Those wishing to bid low may consider $93.30



Frontier Pacific Mining, FRP on the Canadian Venture Exchange.

On May 19 we wrote “The Frontier chart clearly shows a long-term up-trend and an immunity to the recent sell-off in gold and uranium stocks. In our experience such a chart with a plateau as seen the past month or two is very bullish. Soon it will have a big move either up or down, and the trend suggests that move will be up. If not, we'll likely post a sell on closings below $0.70 thus making for only 10% risk or less given the recent closing price of $0.75 If it rises, we'll hold awhile.”

Another month has gone by and the trading range seems to be moving up slightly, as the stock now moves between $0.76 and $0.78 on low volume. Based on our experience we remain of the belief that if or when volume comes back into this stock it will move significantly higher.

See the long-term Hammond Power chart for many examples of flat trading during an up-trend and the common subsequent result on the share price.

The fact that another month of sideways trading has gone by only strengthens our sentiment so we have added to our holdings of FRP at $0.78 We will likely be sellers on closings below $0.70



NUS, Nautilus Minerals Inc.

Last week we bought Nautilus Minerals at $5.15 and it closed today at $5.80 on this good news - "High Grade Assays Confirmed"

Closing over $6.00 should prove extremely bullish for this stock, and we hold in hopes of that happening.



Mega Uranium, MGA.

On June 13, of Mega we wrote “upon closing below apparent support at $6 we've taken a closer look and note that the long-term trend of 2 years is just below the current close. This appears to be an ideal level at which to make initial entries or add to positions, however if closing below $5.50 this stock is technically a "sell" in our view. Please note whenever we cite price levels we mean closing prices above or below those levels, not intraday prices.”

The subsequent lows have been $5.51 so we hold with gaurded optimism. Note that Mega also trades as MGAFF in the US.



Hammond Power Solutions, HPS.a in Canada.

On June 5 we wrote “Hammond dipped today to close at $11.95 We'd be sellers to lock-in gains on closes below $10.00, however those entering currently for the first time may wish to apply a more aggressive stop level of $11.00 to minimize risk.”

The subsequent low close was $11.04 while today Hammond closed at $11.45 and we believe it to be a good buy or hold above $10.00 We are +176% on our initial holdings and +15% on our addition, plus realized an additional +23% gain in a swing position we held for only two weeks per this blog.

Low bidders may consider $11.11 for Hammond Power shares.



Uracan Resources, URC in Canada.

On May 5th we wrote “Uracan Resources is our most recent entry and while we view it as currently consolidating within an up-trend begun in September of last year, we'd be especially bullish and likely adding to positions on a close above $1.00”

On June 5 we wrote “When Uracan did cross $1.00 it kept on going and going, rising to a high of $1.59 or 57% above our April 10 $0.94 entry and closed today at $1.34 We hold, and would not add unless it falls below $1.10”

The subsequent low a week later was $1.10 and today Uracan opened at $1.30 and closed at $1.22 so we hold and remain bullish on closings above $1.00 We are +31% on URC since our entry in April of this year. Low bidders may consider $1.12



Red Hill Energy, RH in Canada.

On June 5th when Red Hill Energy stock was at $1.05 we wrote “An entry here, or re-loading of our position sold for 64% gains in only two weeks on May 02, seems prudent to us per the trend line. We'd likely be sellers on closings below $1.00 so downside would be limited if adhering to a similar sell level.”

The low since then was $1.00 exactly however today it hit a high of $1.37 and closed at $1.32, +26% from our last update. We hope some readers were able to take advantage of that opportunity, as did we. Low bidders may consider $1.12

Our RH holdings are currently +91% since our initial call in August 2006, and we’ve closed an additional position in May of this year for 64% gains after just two weeks holding the shares. We’re holding above $1.00 closes.


Frontier Pacific Mining Corp.
Suncor Energy

Nautilus Minerals Inc.
Mega Uranium
Hammond Power Solutions
Uracan Resources
Red Hill Energy


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Thursday, June 14, 2007

selling CVV, buying NUS

Despite uranium continually rising, now at an all-time high of $135 USD/lb, generally uranium stocks have done poorly the last few months.

Luckily we sold most of our uranium holdings much higher for phenominal profits - including Crosshair +100% and +60%, Altius +97%, Strathmore +130%, Santoy +251%, EMC +151%, UEX +71% and many more, all in a matter of only months after initial purchase, however a few uranium stocks remain among our holdings and we address a pair of those today.


Frist we sell CVV, Canalaska Uranium, as it has closed below its long-term trend three days in succession, booking a 26% gain in the 7.5 months since called.


With Mega Uranium, MGA, closing below apparent support at $6 we've taken a closer look and note that the long-term trend of 2 years is just below the current close. This appears to be an ideal level at which to make initial entries or add to positions, however if closing below $5.50 this stock is technically a "sell" in our view. Please note whenever we cite price levels we mean closing prices above or below those levels, not intraday prices.

Should it come to selling our positions in Mega, we'll be glad to re-enter if a more favorable situation presents itself in the future trading of this stock. If we end up buying back in at a higher level, that's a normal part of the risk involved in all such trading and a fair price to pay for avoiding the high risk in holding a stock that begins trading below long-term support lines. However with luck, we will not find ourselves in that situation and for now we continue to hold.


We buy NUS, Nautilus Minerals Inc., at $5.15 on the Canadian Venture Exchange. Please note we are existing holders of Nautilus, having purchased shares this week at an average price of $5.12 In that regard, we're in good company given their largest shareholders (as of Feb 22, 2007) including :

Epion Holdings - associated with Russia's largest iron ore producer 16.8%
Anglo American 6.4%
Teck Cominco 5.8%
Barrick Gold 3.7%

Click here to read their latest newsletter dated Q2 2007, and click here to peruse the media coverage the company enjoys.

It's an exciting story, but we are most compelled by the price trend which suggests an imminent break to the upside.



Nautilus Minerals


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Tuesday, June 05, 2007

adding MGA, Mega Uranium

On May 05 we wrote,

Mega Uranium, MGA in Canada, remains our uranium stock of choice and we'll be adding below $7.00 for long-term holdings. We hold it at a 24% gain per this blog. It has recently pulled back from a big jump to its all-time high in early April.

Mega Uranium is a rapidly growing, internationally diversified, mineral resources company focused on acquiring and exploring uranium properties worldwide. Mega has uranium resources totaling 47.3 million pounds U3O8 in Australia, and active uranium exploration projects in Australia, Argentina, Bolivia, Colombia, Mongolia and Canada.


We now add to our existing position in Mega Uranium at this $6.30 CDN level. Note that Mega also trades as MGAFF in the US. We feel support can be found down to the $6.00, on closes below which we may turn bearish.


We also note current fair entry levels on the following (italics representing further excerpts from our May 05 update) :

Also at an all-time high is our long-term favorite Hammond Power Solutions, HPS.a in Canada. We hold an initial position in Hammond at a 222% gain plus an additional position at a 35% gain. We also made a 23% gain in two weeks on a recent swing position, all per this blog.

Hammond is a growing and profitable supplier of transformers and related magnetic products. Be sure to click the link above to marvel at their excellent progressive earnings and ponder the bright future of this company.


Hammond dipped today to close at $11.95 We'd be sellers to lock-in gains on closes below $10.00, however those entering currently for the first time may wish to apply a more aggressive stop level of $11.00 to minimize risk.


Uracan Resources, URC in Canada, is our most recent entry and while we view it as currently consolidating within an up-trend begun in September of last year, we'd be especially bullish and likely adding to positions on a close above $1.00

Uracan Resources is exploring for near surface, bulk tonnage uranium deposits in Canada, as this style of deposit can be developed quickly and inexpensively. The company's first two projects have abundant historical data showing several pounds U3O8 per ton over large areas, are easily accessible and have year round access. Management has an excellent track record in creating value for shareholders. Several of their exploration companies have been purchased by mining majors, and they have put mines into production for a major mid-tier gold producer.


When Uracan did cross $1.00 it kept on going and going, rising to a high of 57% above our April 10 entry at $0.94 and closed today at $1.34 We hold, and would not add unless it falls below $1.10



Red Hill Energy, RH in Canada, is a stock on which we remain very bullish above $1.00 We hold our core position at 81% gains and recently sold a swing position for a 64% gain in two weeks per this blog. Red Hill might be a buyout candidate per this press release.

Red Hill Energy is a publicly traded energy company that engages in the exploration, development and (currently) pre-production of advanced coal and uranium projects. The Ulaan Ovoo Coal project has just had it's scoping study completed and shows the potential for a 20 year highly profitable mine. With 206.2 million tonnes of high quality bituminous coal to NI43-101 compliance, the Ulaan Ovoo project continues on it's path to towards production.

The newly acquired Chandgana Tal Coal project has historical data showing 90 million tonnes of sub bituminous coal and Red Hill plans to move the resource to NI43-101 standards. Red Hill is joint ventured with Mega Uranium Ltd of Toronto and has 11 Uranium properties covering 216,170 hectares. The results of field work conducted in 2006 provided Red Hill with a number of targets for advanced exploration with 7 Uranium properties selected for further work in 2007.


An entry here, or re-loading of our position sold for 64% gains in only two weeks on May 02, seems prudent to us per the trend line. We'd likely be sellers on closings below $1.00 so downside would be limited if adhering to a similar sell level.


Mega Uranium

Hammond Power Solutions
Uracan Resources
Red Hill Energy


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