Monday, January 4, 2010

PAL: First One of the Year That Got Away

Actually it got away in front of my eyes (or I should say while I blinked) on December 30, 2009.

North American Palladium Ltd. (PAL) is a volatile small-cap stock that has been basing in the range since August 2009. The bottom trend line around $2.50, the top line at $3.30. On December 30, the last I saw the stock on my watch list was it was negative for the day. Then it reversed, took out the resistance at $3.30 while I was looking elsewhere. (I was looking at UCO to figure out the timing to sell my call options on it. UCO, by the way, did bounce where I thought it should bounce. :o)

Note to self: Is there a thing like "buy stop"?

The chart is 9-month daily chart of PAL. Since the last 3 trading days have left gaps, they may be filled (or so I hope). For now, all I can do is to watch and how it behaves - whether it breaks down right away like it has done before, whether it comes back to the breakout point ($3.30), or whether it keeps going.

Palladium (metal itself) has been acting very strong. In fact, palladium price broke out of a base at the same time PAL broke out, on December 30. With industrial demand (palladium's uses overlaps those of platinum) picking up and a new ETF (platinum and palladium) coming up, maybe this stock still has a plenty of upside.

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