The trading volume has stabilized and the market depth is getting strong below the current price, so it looks like some of the froth is now blown off for KXL. I dipped into the market for another small block of stock today at $3.27 and still hope my stink bid at $3.06 gets filled, but I think we are starting to settle down in this range and unless we get a significant and nasty sector-wide correction from here, KXL may be building a base at this level from which a higher run can be supported.

The biggest wild card for me will come down to how the market reacts to the pending last batch of assays. My instincts tell me there are a lot of people just hanging around and hoping for big news before they sell. That would suggest we still have a serious smackdown coming. In October we got a similar event when the follow up drill results came out during the Cambridge Show and the stock took a 30% haircut intraday. But it also bounced strongly and that is why I am wading in now for a few more shares.

If the assay results surprise to the upside (and that would almost mean hitting 3m of solid gold at this point since expectations are so high) then KXL could easily take out the $5 level before we have to go through the whole process again and wring out the excess speculative froth.

At the end of the day, my outlook is unchanged. I think this project is likely going to be the top discovery story in Canada for a long time to come, and there will be intervals of limited news flow during which the stock will be flat, but there will also be some pretty impressive hits as the exploration continues and that should be enough to carry KXL higher, volatility and all. It will take a strong stomach to ride the waves here. A sound strategy to lock in a core position, while maintaining a trading position to capture some of the gains from buying dips and selling spikes will probably pay off very nicely.

cheers!

mike