Friday, March 20, 2009
Started a position in NovaGold Resources today
(ticker: NG). This is a risky, speculative play on a smaller gold mining company (i.e. not for conservative investors!). During a gold stock bull market run, like the one that began this past October, the large cap blue chip miners bottom and begin to rise first. Once it is clear a bull run has started, the smaller cap, riskier and more speculative gold miners then begin to perk up and make a run up in price.
I entered a bullish position on NG today near the lows via June call options and have an order in for some additional calls that should fill if the stock drops a little more. The bulk of my investment money is going into GG (Goldcorp) and RGLD (Royal Gold), but NG is a potential high reward short-term play (possible 200-300% gains in 4-8 weeks using options). NG has not made as big an initial upward thrust as the larger cap gold mining stocks have over the past two days, but it should move big before this final spring rally leg in gold stocks ends.
Below is a 60 minute intraday chart covering the last 5 months with my thoughts:
Wish me luck...