Hello Lou,

TKO and FAN : Buy, Hold or Sell?

Thank you,

Stan

Hi Stan,

I last posted on Taseko Mines Ltd. (TKO-T4.55-0.04-0.87%) on April 8, 2010 and my thoughts at the time was to protect profits. The stock was trading at $5.52 on the day I published the piece and by July it was trading in the $3.50 range. It did catch a bounce off of $3.50 and ran to $7 but has since fallen back to $4.67.

I guess the lesson from this case is that you have to watch your stocks every day and look for entry and exit points. Farallon Resources Ltd. (FAN-T0.78----%) is not a stock that I am familiar with so thanks for bird dogging it for me and other readers. Let's consult the charts to see if we can find some opportunities.

The three-year chart for TKO illustrates the lovely uptrend that was broken as we got to the end of April 2010 and the bounce off of $3.50. The subsequent ascent to $7 was stopped cold when the Prosperity Mine in British Columbia was denied approval to proceed on Nov. 2, 2010. There is currently a call for an inquiry into an alleged leak of the decision on the spike in volume that occurred in mid-October. In my house, we always say: 'Guys in the know – know.'

The six-month chart depicts the asset shredding decision that took the Prosperity Mine out of play. What is evident is that there is now resistance at $4.75 and support at $4.50. That’s a very tight range. If you like the TKO story then it's a hold in hopes that they can make the changes needed to bring the Prosperity Mine back from the reject pile.

The operative term in the statement when the proposal was rejected was that it could not be approved as 'currently' proposed. That’s code for 'get out your cheque book, get the engineers working overtime, and redesign the elements of the proposal that are holding it back.' I would probe to see if management intends to support their $800-million project by investing in the creation of an alternative.