QuardraFNX giveth and taketh away

Jan 26th, 2011 – Comment

It sounds like you want to get off of this ride so follow your gut and see if there is a better point to get back on.


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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.


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Hi,

Looking at QuadraFNX would appear they have good prospects to come out ahead by year’s end, however the recent less – than – stellar production results seems to have hit pretty hard.

In looking at the Weekly view vs. Point and figure I am now quite confused about whether to cut my loss or continue believing they have a brighter outlook based on the fundamentals of supply & demand in the copper market.

Any thoughts you could offer are appreciated.

Dawn

Hi Dawn,

I last posted on QuadraFNX Mining ( QUX TSX) on June 14, 2010 for May. At the time the stock was trading at $12.25 and had been giving up ground from the highs of March 2010. The stock continued its retreat until August of 2010 when it formed a double bottom and reversed the downtrend. The charts will provide some guidance as to trend, support, and resistance.

The three year chart clearly illustrates the resistance at $18.00 which has proven difficult to overcome since January of 2010. The stock has support at $10 which where the double bottom formed in August.

The six month chart depicts the double bottom in August of 2010 and the MACD signalling the trend reversal at the same time. The run from $10.00 to $17.00 in early November was nothing short of sweet. A 70% gain in 10 weeks will usually see people standing and applauding when you come through the door. Sadly that door isn’t often to your home or office.

The big drop in January appears to have started before the news hit the street that QUX would miss its production target of 300 million pounds of copper for 2011 and guided output to 240 million. As mentioned many times guys in the the know; know.

At this point it looks like the stock is trying to hold onto support in the $13.00 range but the MACD and RSI are not confirming a reversal of the selling just yet. Typically your first loss is your best loss. It sounds like you want to get off of this ride so follow your gut and see if there is a better point to get back on.

Happy Capitalism!

Categories: Mining
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