Thursday, September 3, 2009

July 15 2009 newsletter available to public -- deals with KGC

the PDF is on the Old Reports page, or directly by clicking the following link:

Trend and Value Letter 07_15_2009.pdf

I thought I'd put this one up for public consumption just because KGC hit the upside target I mentioned in the letter. actually, in the letter itself I equivocated a lot about the direction of the stock would move so I am not really trying to brag about making a great call, rather the 22 number came up in more detail during an email exchange I had with a reader that morning. here is the question the reader had for me at the time:

so Lucas, this forceful breakout of KGC in the near future...being wi a few hours?

supposin' - for discussion purposes - a body had some you reckon there'll be more upside then approaching $22.

again, Lucas, no expectation of a response...only if you're inclined.

interesting letter this morning...your commentary about Dell and Intel was very credible to me.


and here was my response:

remember that the initial breakout target I had is the .755 retracement at 19.87, which is barely above the previous high (and now today's high).

beyond that, yes, 22 looks like a target, but the way I am currently
viewing the overall markets that would be perhaps the maximum upside
one could expect.

notice the 'rising wedge' pattern on the attached chart. the price
could run to 22 and not violate that pattern. but the pattern itself
is bearish (in my opinion). and there is no guarentee that kgc will
hit the upper end of pattern yet again.

considering all this, the call option selling strategy you have
employed in the past may be appropriate now. though the question would
be of timing, as premiums would likely increase dramatically with any
more upside from here.

hope that helps a little.

and here is the exact chart of KGC I attached to the email with the same trendlines (but updated through today's close):

the point of all this? well, I needed to write a blog post about something. . .

plus I wanted to show the lurkers out there an example of what we actually do here at Trend & Value.

now the question is whether KGC actually reverses here at 22. that's a tough one.