This Week’s Commentary – June 2, 2007 – Start Buying

by JDH on June 2, 2007

Last week, quoting Queen, I expressed the opinion that we may have reached a “fat bottom”, which of course is just a silly way of saying many stocks were making a double bottom formation. I gave the example of FRG.TO – Fronteer Development Group Inc. that made an intra-day low of $12.15 on February 27, and has remained above that level. Fronteer closed at $13.10 last Friday (May 24), and closed at $12.84 on June 1, so it was down for the week, but since the February 27 based was not broken, I think we are still in good shape.

Fronteer Development Group Inc

Here’s another example: CXX.V – Crosshair Exploration & Mining Corp., which I have once again begun to accumulate.

Crosshair Exploration & Mining

Crosshair got as low as $2.45 on February 6, got down to $2.55 on May 1, and fell to $2.63 on May 17. That’s a series of higher lows, which is a good sign. Obviously the down trend that started at $4.20 on December 6, 2006 is still intact as well. Since a stock can’t both go down and go up forever, this anomaly will resolve either to the downside or the upside. I think it’s resolving to the upside, so now is a good time to buy.

I mentioned last week one of my new holdings, UUL.V – Universal Uranium Ltd. I’ve been accumulating it for a few weeks, and Friday it was up 12.5%, and it appears poised to break out. Do your own due diligence, including reading their press releases on the Universal Uranium web site; drill results were very good when released on March 1 (see the big spike in the chart below); it pulled back, and now I believe it’s poised to go higher.

Universal Uranium

How did I hear about this one, since it’s not on any investment newsletter writers’ lists (that I am aware of)? One of it’s shareholders is our old friend PNP.TO – Pinetree Capital Ltd.. You can read the details in the Universal Uranium and Pinetree press release.

Speaking of Pinetree, I am not loving their chart at the moment.

Pinetree Capital Corp.

I don’t see a “fat bottom”; all I see is a downtrend, so I have been selling some of my holdings this week. (Yes, I know, last week I said I would do some buying; I changed my mind, based primarily on the look of the chart).

Finally, yesterday I posted a new recommendation: GBU.TO – Gabriel Resources Ltd. This is a very risky play, but if you want to have some fun, this may be a good one. You can read my post from Friday on Gabriel Resources here.

My point:

Despite having not made any significant money so far this year, I still like where we are at. I think the consolidation is over, although one final capitulation is possible, like we had last year. However, since the correction was not as severe this year as last year, and since the price of uranium will probably be making a new high this week, I plan to take my chances on the bull side.

Thanks for reading, and thanks to all of you who share your thoughts on the Buy High Sell Higher Forum; good luck this week, onwards and upwards.