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Jordan Roy-Byrne, CMT, MFTA |
TheDailyGold: Short-Term Low in Gold & How I Research Juniors...
Published: Thu, 07/08/21
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Gold and gold stocks likely made a short-term low last week. Gold rebounded around important support at $1755 while gold stocks became extremely oversold, as far as their breadth indicators.
More analysis in my article here, including upside targets. After reading that, you can watch the video version which expounds upon the historical similarities to 2004-2005 and 2016-2018. I also mention potential bottom targets. Watch the video analysis here. And if you want to hear more, take a listen to this interview in which I discussed Gold's cup and handle pattern in detail and a potential catalyst for next year. Listen to the interview here. ------------------------------------------------------------------------------------------- If you want a good laugh, you can usually find one in the comments on YouTube videos. It's comments like this that keep me producing content....  Subscribe to TheDailyGold Premium for Only $149
------------------------------------------------------------------------------------------- "I am simply a pure market-timer for a broad basket of gold stocks and precious metals. Jordan, on the other hand, has provided superior STOCK-PICKING abilities over the longer-term. I am familiar with most gold stock subscription services over the past 30 years. I rarely provide endorsements of any kind, but Jordan's ability to analyze individual gold/silver stocks has been among the top 5 services over the past decade. First and foremost, I respect his integrity. -Jeffrey Kern, SkiGoldStocks.com Subscribe to TheDailyGold Premium for Only $149 ------------------------------------------------------------------------------------------- Let me give you an example of my research process. In TDG #733 I added a junior producer to my watch list. This company has a strong management team and has produced solid results. However, the stock has declined quite a bit. There doesn't appear to be anything wrong- only a few minor concerns here and there. The long-term technical picture is not broken. Here are the important factors I'm considering... What is the company's cash flow and how much per oz produced? What is the company's valuation at the current Gold price? Estimate the valuation in the past at peaks and valleys in the Gold price? What is the production growth potential? How much capital investment will that require? How will they pay for it? How does exploration factor in? Can you quantify the potential? Put all this together and we can assess the long-term upside potential. And we could also estimate a downside target if Gold went to $1600. Anyway, this company is valued at less than 5x cash flow. Gold doesn't have to break $2100 for that to be 7x in the future. In addition, I think production has a chance to grow 50% over the next few years. Should Gold break $2100, their margins might double from here. Then there is the question of their ability to execute and likelihood of success. I'd rather invest more capital in something with 4 to 5-bagger potential and good odds of success than a potential 10-bagger with low odds of success. I do own a few stocks with 10-bagger potential and decent odds of success, and some others that could be 7 or 8-baggers in 2 to 3 years if Gold goes to $3,000. Subscribe to find out the names! -------------------------------------------------------------------------------------------
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