I have already given Drd Gold mention a couple of times on here, so I thought why not put Drd Gold into the before and after category for the fun of it on a near term basis analysis. Maybe there could be a lot to be learned from this one. We shall see. Part of the reason for opening this one up is to see if the 41 million share sell off day a few weeks ago was the selling climax.
Highest Volume day on record for this gold stock
That 41 million share sell off day was indeed the highest single volume day ever for Drd Gold according to my research. Yes, the news is horrible right now on Drd Gold. There was even news recently of earth quakes near some of their mines causing them to shut them down. Talk about bad news! geez. On top of the financial difficulties they are having, then add an earthquake in there to make things worse. This is yet again, another great example of the relationship between news and the price. The news is clearly very bad.. Perhaps the only good news that is at least starting to come about is a more supportive rand gold price mentioned in the post previous to this one.
Again, the intermediate trend in Drd Gold is still quite bearish. Strong downward persistent price trend with no real indication of a change in supply demand relationship to the bullish side.
So the reason I am opening up this 'before and after' virtual trade is to highlight what could possibly be a shorter term bullish situation within an intermediate term more bearish situation.
One other quick thing I wanted to mention without showing the gold stock chart for it is that the RSI level on the weekly chart is at 26.74, a level only achieved 2 other times going all the way back to July 16th 1999. The other time was November 17th, 2000. In both other instances those RSI levels marked long term price lows for Drd Gold stock.
On the shorter term chart again it comes down to the volume story here. I do not think Drd Gold will be able to break below this 41 million share day swing. At least not immediately if it even were to do so. Price is now drifting down in a slow lazy retest near the low of the high volume swing.
So the virtual before and after setup is as follows:
Entry at .83
Protective Stop at .80
Objective is to between 1.00 and 1.09
Risk is -3.6%
Potential Return: 20 to 31%
P.S. I can't wait to put up the price of gold and silver charts (the long term ones I mean). They will probably be some of the most important longer term charts I will have ever put up on here.
P.P.S I am going to officially name this before and after case "Diving Head First into an Inferno"