Yukon-Nevada Gold Corp. has had its run

May 2nd, 2011 – Comment

At this point I wouldn’t be chasing YNG. It is struggling with a new established downtrend, the momentum indicators are not indicating that its about to reverse that trend, and the company is currently dealing with some operational issues.


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Lou,
I read your earlier answer on Yukon-Nevada Gold. It is now trading at .50+. What are your views on this stock now?

Pran

Hi Pran,

The June 18, 2010 post on Yukon-Nevada Gold Corp ( YNG TSX)  for Arthur noted that the stock was building a base and that the bigger the base, the better the case for an investment. From the lows of $0.20 seven months ago YNG jumped to a high of nearly $0.90. Unfortunately it has pulled back from those highs to its current trading range around $0.55. Lets consult the charts for a review of what has been and some indication of what might be for this stock.

The three year chart illustrates the base that was built in the range with support at $0.20 and resistance at $0.30. When YNG broke above $0.30 in mid July 2010 it signalled that investors were willing to pay more to get on the ride. The advance was not long lived but did generate a healthy return before reversing field. I have often advocated capturing profits when available and YNG is a perfect example of watching for signals to preserve your hard earned gains.

The six month chart depicts the downtrend that has been established and the need to act on the information that the charts are providing. The MACD indicated  that it would be prudent to take profits in mid December2010 when the stock was trading at $0.82. It subsequently pulled back to $0.62. generating a 24% reduction in capital. In mid January 2011 the MACD and RSI both signalled that the momentum was shifting to the buy side driving the stock back to $0.82. Finally there was a sell signal emanating from both indicators in late February that has seen the stock pull back from $0.82 down to $0.55.

At this point I wouldn’t be chasing YNG. It is struggling with a new established downtrend, the momentum indicators are not indicating that its about to reverse that trend, and the company is currently dealing with some operational issues.

Happy Capitalism and please get out and vote today!

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