StockBullz.com: Your Daily Stocks Blog

I have been cautiously long a small test position in Aurelian for a couple weeks now and all was going well until today.

Why?

Because Aurelian reversed its trend today. That is, the share price fell below its 30 day Moving Average.

Now of course, the price could gap up tomorrow like Bayswater did shortly after I sold it.

However, the trick of successful investing is very simple: keep your losses small and let your winners fly.

By selling Aurelian now, I don't lose any money (unless the stock gaps down severely tomorrow) because my stop was trailing the share price.  

So I am guaranteed no loss on this speculation.

However, if I stick with the stock believing this great story of one of the best drill results ever, I leave myself vulnerable to further losses.

Yes, the stock may quickly rebound, but seriously, you (or anybody else) never knows for sure.

So I feel this is the safest and most prudent thing to do at the moment.

In my opinion there has been a lot of hype right now about the current play that is "hot", that is the Cordillera del Condor area in Ecuador. Aurelian recently intersected some of the best grades in a long time there.

Now of course every time a company like Aurelian makes a huge break with great results, there always seems to be a big rush to claim all the land around the first company's claims.

In the case of Aurelian, there are now several companies vying for investor's attention by saying they are right beside Aurelian and they will find grades just as good or even better than Aurelian.

Now I don't buy this and I think investors come out better time after time going with the real deal rather than the tiny companies feeding off the scraps.

The last hot play that I can recall was the Mont Laurier one of which Nova Uranium was the top dog there. They kept quoting 77 lbs historical resource and during the time period until the drill results, the price rose 1097% from bottom to top.

Aurelian Resources is a company that I have mentioned briefly in the past couple weeks. The chart is madness and I expressed concerns about such quick and such profound share price movements.

However, as long as the price stays above the trend line, I cannot bet against it. I am not smarter than the market and right now the market is telling me that the share price could still go higher.

The thing that I still haven't seen yet is the distribution by the pros. I have identified the accumulation phase in the chart below but to me, the distribution phase is still to come. It could be tomorrow or next week but I'm guessing it will be more towards the beginning of september. Why?

Well ARU's $20M private placement holding period expires on August 28th and sometime around then could be the distribution phase. I am speculating but what level headed individual wouldn't want to cash in 10 bagger gains off their private placement only 4 months ago?

I just finished reading a tiny little 100 page book by the title of "The Story Behind Canadian Mining Speculation". It was written about 50 years ago by T.H. Mitchell and it should be a must read for any current mining speculator. If you can get your hands on it that is. Try searching for it at your university library because that is where I found this copy. Anyways, here are some great bits of information that I got from the book:

It should be clearly understood by the Canadian investor that the majority of the "penny" stock companies are worthless and always will be worthless. This has been proven time and time again. Yet their stocks have a definite value as a speculative trading medium; in other words, the stocks themselves are not worthless so long as somebody is willing to buy them. Thus, one has to be pessimistic about the possibilities of the companies, yet optimistic about the profit opportunities which their stocks present. And these are the sentiments which guide the professional traders.

MEXICO CITY (Reuters) - For all the talk of the rise of Latin America's left, Mexican presidential hopeful Felipe Calderon could show on Sunday that, while unfashionable, U.S.-style conservatives can still win hearts and minds.

Years of stuttering market reforms under outgoing President Vicente Fox from free trade to a credit card bonanza have taken root among many voters who fear leftists so popular in countries like Venezuela and Bolivia could bring ruin.

Leftist Andres Manuel Lopez Obrador is a slight favorite in Sunday's elections but polls are so close that a win for the Harvard-educated Calderon, promising more foreign investment and pro-business reforms, is a real possibility.

I think that a win for Lopez would make mining executives with properties in Mexico just a little uneasy.

If Lopez got influenced by Chavez, then maybe he would also want to nationalize the mineral properties that are so valuable.