Tischendorf Letter Trading High Potential Stocks GMO General Moly (AMEX) – Mol
posted on
May 04, 2010 09:45AM
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Another quick post as I know quite a few hold GMO – General Moly in their portfolios. Today’s price action is bullish. The stock has finally closed above the significant 4.00US$ resistance line. I recently stated in my chart annotations I was starting to seriously dislike the chart’s personality. In hindsight it now sure looks like it was the stock’s way to shake out weak hands. We almost tested the 4.00 $ level on an intraday basis but the stock didn’t go that low and pullback only briefly. GMO then ended the day closing near its high of the day.
Irregardless of today’s bullish action there are a few cons that come to mind:
Up-to-date GMO – General Moly chart on my public list.
GMO – General Moly might develop into the new leader of the Molybdenum realm and money flowing out of TC might find its way into GMO. Considering the fact TC’s market capitalization is roughly five times the one of GMO I would consider this scenario to be rather unlikely though. I would stay cautious and watch TC – Thompson Creek Metals for clues as where the Molybdenum stocks as a group are headed to. The best setup would be a small bullish consolidation pattern forming with GMO and the breakout of that pattern coinciding with a price recovery in TC. One cannot ignore GMO’s strength but right now it still feels like the stock is somewhat fighting the tape when it comes to the overall sector’s performance. I think a TC recovery will provide a great opportunity for GMO – General Moly to outperform.
Volatility often occurs after extended rallies and before