If you spend any time researching the companies that you are thinking of trading stock in, I’m sure you’ve seen the advertisements, the pop-up windows and the e-mails informing you of different websites that will give you alerts on penny stocks that they believe that will make you some great gains.
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The only problem that I see with that is you really don’t know the person who is running the website. Quite a few of them are actually fund managers that use you to help pump up the price of the stock to help them make more money. Of course I’m not saying that all of them are like that but you need to be aware of you might be dealing with.
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I myself subscribe to many different alerts from websites just to see what is going on. In many cases I watch their picks to see if they are going to be right or wrong. Unfortunately many of the picks don’t really go anywhere after the initial jump. How I see it, many of these website/traders position themselves in a company, start hyping it up that it will do great for their readers/subscribers. As the price goes up they start scaling out their position. Most of the stocks that I’ve been watching over the last two months from these alerts would have lost me thousands of dollars. Don’t get me wrong, I would have made money on some of the picks, but not as much as I would have lost.
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The latest stock that I’ve seen being pushed is Biocentric Energy Holdings (OTC:BEHL.PK). I saw this being pushed by several different websites. I figured that this too would be another pump-and-dump fiasco as I’ve seen before. The stock price was $0.023 per share when I first received the alert, after three positive days where it went to $0.07 I was waiting for the price to fall. To my surprise, it still hasn’t started to lose momentum. As of this morning, the price per share was to to $0.14, a gain of over 500% in just a week or so.
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I’ve talked about it before and said that buying penny stocks can be very rewarding, but at the same time you can lose a ton of money. Be careful when you trade penny stocks, even more so than you would with bigger cap companies.
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Agnico Eagle Mines Ltd is up and running again today after they reported their second quarter earnings report. I’ve spoken about them in the past in regards to having a position and using a technique referred to as channel trading..
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Well so much for that idea now that the company has posted some good results and given some (in my opinion) great guidance. It will be some time before I’ll know what their new trading range will be. On top of all the news that AEM released, there have also been several analysts that raised the target price for Agnico Eagle.
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Yesterday when I saw the price dropping I put in a limit buy order at $52 per share. Unfortunately the low of the day was $52.17. I figured that I’ll just get the shares today at even a lower price, but when I was watching Mad Money with Jim Cramer, he had the CEO of Agnico Eagle on to discuss the report. I knew at that point the shares would go up in the pre-market and continue to do so throughout the day. So I had to put in a limit buy in for 54.00 (hoping that it would be a good bid) before the market opened and was lucky that it did trigger. I think we’ll see some great thing from this company in the next few quarters and I expect to make some great gains with this stock.
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Their two newest mines, Kittila and Lapa have achieved commercial production as well as their other mine Meadowbank and will be operational in the first quarter of 2010. If you haven’t jumped into Agnico Eagle Mines Ltd., do your research and maybe this can be a winner for you and your portfolio.
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Second quarter 2009 highlights include:
- Record Production – record gold production of 119,053 ounces. First gold poured at Pinos Altos in July
- Good Cost Performance – LaRonde, Goldex and Lapa achieve good
minesite cost performance
- Commercial Production At Lapa And Kittila – commercial production
achieved as of May 1 at both mines
- Remaining Two New Gold Mines On Schedule – Pinos Altos and Meadowbank remain on schedule for initial production in third quarter 2009 and first quarter 2010, respectively
- Growth profile bolstered – expected after-tax internal rate of return (“IRR”) of 76% at Goldex expansion and 17% at Pinos Altos expansion at Creston Mascota
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Happy trading.
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It has finally been decided that the art of naked short-selling will be banned from now on, which is a good thing since that technique of trading is what caused the demise of Lehman Brothers and many other stocks of the financial sector.
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I’ve never really been a fan of short-selling any stock even though I’ve done a handful of times. Short selling is the idea of betting against the stock, expecting it to go down in value. A trader will borrow and then sell shares of a company, only to buy them back at a lower price to return them back to the entity that they borrowed them from. With naked short-selling, the trader doesn’t worry about borrowing the share before he sells them. At that point he/she has to look around for someone to borrow the shares from. In most cases there aren’t enough shares to go around, causing turmoil and wild swings in the stock price.
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Now the SEC has included a requirement that all brokers must buy or borrow the shares promptly to cover the short sale. The SEC is also considering several other ways to limit short selling. Let’s not forget that it was the SEC that removed the up-tick rules a few years ago.
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The up-tick rule refers to the price of a stock has to move up in price by at least a penny before anyone else can short the same stock. That helps avoid a runaway drop in the stock price.
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