CGR Watch

The Canadian minerals company Claude Resources Inc. (CGR) is up 2.7% intraday on a volume spike that so far, with 90 minutes remaining before the close, is running three times Monday's volume. The company on Monday released happy stats on the performance of its major gold mine.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
CGR $1.14

The question here is whether to buy after the happy news. Nathan Rothschild's "buy on the cannons, sell on the trumpets" dictum is still good advice for traders, and yesterday's news release was the trumpets.

Here's the argument for treating today's rise as only the beginning.

The price so far has peaked today near $1.14, the same price as on May 27. If this week's good news really has improved the company's position, then that price should be significantly above that resistance level to accommodate it.

Today's volume so far is just a bit above the level of June 3. So, same reasoning: The company's position is presumed to be improved over what it was 12 days ago, and that should translate into higher volume.

The parabolic sar, Person's Proprietary Signal, the macd and the fast stochastic are all in bull phase.

The price on June 10 closed above the 20-day simple moving average, and hasn't closed below it since.

The counter-argument is that the stock has gone basically nowhere since December 2009, trading in an (admittedly very large) range of $1.40 to 95¢ (with a one month breaking below that).

The average directional index is way low, meaning its not a strongly directional stock.

Reversal Levels

• $1.27, +11.4%
• $1.16, +1.8%
• $1.14 <== You are here.
• $1.05, -7.9%

Longer term, CGR peaked at $2.05 in February 2007, and then declined to 12¢ in November 2008. Since then it has risen in a rising zig-zag: Up, Retrench, Up, Retrench. If the price can break above $1.38, then the uptrend can be side to have resumed.

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Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.