By Joseph Granville
December gold gave us a confirmed breakout above the 695.00 level. Next test will be at 733.00. Anything higher will signal an easy move to 800.00. Lowest priced shares will give us the best percentage gains. Many new names will be reviewed. Now almost any gold stock looks higher including the higher priced golds.
Gold is a knife that can cut both ways. It is warning for the general market as well as a bullish call on itself but it cannot take any pullbacks here. Play close attention to the stop loss levels. We don't want to see December gold go back below 695.00.
Agnico Eagle (NYSE: AEM; 49.96) This stock takes me back many years when I first told subscribers to buy Eagle Gold at a dollar a share. That recommendation created a close friendship with Paul Penna. He flew down from Toronto to Ormond Beach, Florida to meet me and play golf. When gold peaked at 875.00 in early 1980 this stock stood at 13.00. It later ran up to 35.00 in October 1987. Now it made a confirmed new high. Must stay above 39.00. Buy the February 55.00 calls. Place stop loss at 45.00. Buy.
Barrick Gold (NYSE: ABX; 38.68) Like Agnico Eagle, is soaring with no sign of a break. Buy the January 42.50 calls. Place the stop loss at 35.00. Buy.
Coeur D' Alene (NYSE: CDE; 3.76) Choosing the gold stocks seen here, I focus on the closest chart breakout levels. This stock requires a breakout above the 4.20 level. That would then trigger a series of upside breakouts over the next 6-8 months, those being at 4.80, 5.50, 5.85, and 7.30. A return to 7.30 would be of major importance, that being where the stock topped out in mid-2006. Buy the January 5.00 calls. Place the stop loss at 3.20. Buy.
Golden Star (NYSE: GSS; 3.86) One of our great winners but its got some work to do. It bottomed at 2.90 in early September. Initial rise was to 3.70 before the pullback to 3.45. Now has made a major breakout above 4.00 and I am looking for another breakout above 5.00 with further runs to 6.00 and 7.50 Buy the January 5.00 calls. Place the stop loss at 3.30. Buy.
Gold Corp. (NYSE: GG; 29.43) Recorded a double bottom at 21.00 in late August 2007. The key 31.60 breakout triggers the major run to the 41.50 level, last seen in early May of 2006. December gold cannot see 800.00 without seeing new highs in all the gold stocks shown here. Buy the January 35.00 calls. Place the stop loss at 25.00. Buy.
Gold Fields Ltd. (NYSE: GFI; 18.07) Bottomed at 13.75 in early August 2007. First required breakout is a move above the 18.75 level. We then look for a breakout above the April 20.60 level which will raise the projection to 24.30 last seen in July 2006. Then comes the major test at the 26.75 level, the old high which was seen in April 2006. If future prices of gold are to be real and sustainable then we must see that confirmed with new gold stock highs. Buy the January 20.00 calls. Place the stop loss at 15.00. Buy.
Great Basin Gold (NYSE: GBN; 2.81) Saw its low at 1.88 in late August of 2007. Seeing the vertical angle of rise here, it may be difficult to sustain the advance. To see the problem solved will require a pullback followed by a series of rising zigzags. So what we have here is a slowdown with no quick series of new highs above the 3.20 level. Keep a close focus on this stock. It could be the first to give us a gold warning. The current angle of rise cannot be sustained. Place the stop loss at 2.25. Buy.
Harmony Gold Mining (NYSE: HMY; 12.09) Became dramatically oversold at 8.30 in late August. Initial upside breakout taking place recently was at 9.90 taking the stock to current price shown here. Now about to hit a sliding pole in reverse, first immediate target on the upside is 13.40, Next target thereafter is 15.50. Assuming gold stays bullish, next upside target is 16.90, last seen in late April. Assuming further upside targets of 17.00 and 17.90 will be bettered, a new high above 18.75 can be anticipated. Buy the January 15.00 calls, Place the stop loss at 9.90. Buy.
IAMGOLD (NYSE: IAG; 8.38) Met long-term chart support at 6.50 in mid-September and rose to current price at 8.98. Filled a chart gap at 8.20. Thereafter, new short-term targets of 9.20 and 9.80 lie ahead prior to a strong runup to 11.80 where stock had peaked in August 2006. Buy the December 10.00 calls. Place the stop loss at 7.00. Buy.
Kinross Gold (NYSE: KGC; 14.61) I especially like the chart here. It made a triple top breakout at 14.25. That should be followed by a move above 15.28, a level last seen in September of 2006. That projects a runup to 19.50 in 6-8 months. Buy the January 17.50 calls. Place stop loss at 12.00. Buy.
Linux Gold (OTC BB: LNXGF; 0.18) this is my #1 gold stock for maximum percentage gains ahead. Here I believe a little patience is going to pay off Big. My chart shows that anything over 0.20 calls for a quick runup to 0.30. Anything higher projects to 1.00 or more in a year. Buy.
Royal Gold (NYSE: RGLD; 33.01) Here we have a double bottom at 23.25 in late May 2007. Upside targets here are 36.00, 37.50, 39.00, and 40.50. Buy the January 40.00 calls. Place the stop loss at 28.00. Buy.
Yamana Gold (NYSE: AUY; 11.52) Bottomed at 9.50. Sharp rebound followed to 11.80. Upside requirements from here include moves above 14.00, 14.10, and 15.45. Buy the January 15.00 calls. Place the stop loss at 9.50. Buy.
Editor's Note: Joseph Granville is editor of The Granville Market Letter, P.O. Box 413006, Kansas City, MO 64141, 1 year, 46 issues, $250. www.GranvilleLetter.com.
