David's Trade Journal

[david_3011]

Trade Journal: Golden Star Resources (GSS)

Here's a couple of trades that I had posted on my website, but I hadn't had time to post them on iHub till now. I'll post GSS first.

Technically, the May 2 intraday low $2.33 should’ve been the long-term bottom. It’s not probable for GSS to go any lower than that, and we’ll go over that later. For now, this short term chart shows some very positive technical signs as per my annotations. The only thing I’d like to point out is the resistance at $3.20 - $3.40 level (red circles). GSS had attempted to cross above this resistance, but it got defeated every time. It may seem odd, but the next chart should provide some insights.



You can see on this price and volume chart, that $3.30 was the second gap (yellow highlight) when GSS fell the hardest enroute to the $2.33 low. You can tell how hard the fall was just by looking at the volume bars (blue circle). That was when the big sell-off occurred, and I’m sure share holders still traumatized by that. And that might’ve been the reason for the selling activity at that $3.30 level. That’s the shareholders' psychology GSS will just have to overcome.



And, finally, I’ve annotated the lowest points on this multi-year chart that took place right around the same time as the May 2, 2005 intraday low $2.33. Interesting note was that the volume also happened to be the lowest since GSS started its descend. This verifies that $2.33 low as the bottom.

And so, this is our trade:

Buy: Long position buy on the dip and under $3.25
Holding Period: 6 months to a year
Stop: $2.95 and trailing as the price moves higher
Target: $7 - $8 or 24% - 56% gains.

My buy-on-the-dip order was filled on Tuesday, 7/26/2005, at the cost of $3.02.