Rubicon Minerals Corp. is a trading stock

Aug 15th, 2014 – 1 Comment

At the moment there is nothing on the charts to suggest that selling has abated.


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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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RMX LOGO

On August 13, 2014 Jeff, an AM 640 listener, asked for an analysis of stocks he was holding for his retirement. Today I will examine the case for Rubicon Minerals Corp. (RMX TSX) which Jeff had purchased for $2.12 a share. This will be the second time that I examine the company.

The last time was on July 12, 2013 on a request from Jim. The stock was trading for$1.30 and he wanted to know if I thought it would be prudent to buy more to average down on his original purchase price of $5.00. Averaging down is not something I usually recommend. The analysis indicated that there were plenty of trading opportunities even with a stock that was in the grips of a downtrend. At the time the RSI and the MACD were generating signals that a trade was setting up. Retrospectively that is what transpired.

Another inspection of the charts will provide the basis for my opinion.

 

 

RMX

The three-year chart illustrates the trade that formed in July of 2013 as the stock caught a lift from $1.20 to nearly $2.00 by August but that was all the move higher had to give. What is also noticeable is the resistance that came in along the 200-day moving average and the downtrend line. RMX retreated to a 52-week low of $0.69 by December of last year where buying started to come in.

The MACD and the RSI both generated buy signals at the lows and RMX ran back towards $2.00 by mid February 2014. Once again the shares pulled back retreating to $1.00 by late May. The momentum indicators then signalled a buy sending the shares to just over $1.75 by mid July.

In the July 12, 2013 analysis it was advised that RMX offered a number of trading opportunities but was perhaps not the best stock for a buy and hold investor. It would be safe to say that we continue to see the same scenario playing out in 2014.

 

 

RMX2

The six-month chart provides a close-up of the buy signal generated by the MACD and the RSI in June leading to a sweet gain in less than sixty days. The momentum indicators signalled a sell by the later part of July when the shares began a retreat from $1.80. At the moment there is nothing on the charts to suggest that the selling has abated. The best way to approach this investment is to consider a trading strategy.

 

Make it a profitable day and happy capitalism!

 

 

 

 

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