Protect your profit

Apr 9th, 2010 – Comment

At this point it looks like TKO is going to pull back to the 50 day moving average. Over the next twelve months the company will be spending to develop its Prosperity copper gold property with production not expected to come on stream till after 2013. Given that you are in the money on the trade I would suggest booking some of your gains.


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about Mining.


Taseko

Hi Lou:

I enjoy listening to you on the radio!

Would you kindly provide your thoughts on Taseko, it appears to be a
well run company, I like the fact they hedge 50% of their production,
and they always meet their expansion plans on budget and on time,
their reserves are considerable, and they are close to starting work
on the new Prosperity Mine.

I own a fair number of shares at an average cost of $3.00.

What is your view on the next 12 months.

Thanks in advance, regards

Jim

Hi Jim,

Thanks for the assignment! Taseko Mines Limited (TKO TSX) has had a great run and at your average cost per share you are sitting on a nice profit. The question is if you are better off to protect the profit or let this horse run?

tko

The three year chart was picture perfect until we got into  mid January of this year when the solid uptrend line that supported the advance from the lows of  December 2008 was breached.

There was a bounce off the 50 day moving average but the stock couldn’t take out the previous high. That would put the caution flag on the track given that giving back hard earned profits usually leaves a bad taste.

 

 

tko2

 

The six month chart tells the tale of a stock that is losing momentum. At the mid January high the RSI indicated an overbought situation and as TKO bounced off the 50 day moving average in March it also signaled that buyers were enthusiastic but not enough to take out the high.

The fast stochastic is currently indicating a shift in momentum to the downside and you can see that the MACD is starting to turn lower. The last candle stick on the chart is also suggesting that the market is unclear as to direction of TKO.

A saying in the field of technical analysis is that in the price there is much knowledge. All the information regarding a company is reflected in the price. Right now the price is indicating that the market is unsure as to the direction of the stock.

At this point it looks like TKO is going to pull back to the 50 day moving average. Over the next twelve months the company will be spending to develop its Prosperity copper gold property with production not expected to come on stream till after 2013. Given that you are in the money on the trade I would suggest booking some of your gains.

 

Happy Capitalism!

Categories: Mining
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media