Filling in the Gaps, Getting Ready for the Fall Party Season

TODAY'S DISCOVERY, TOMORROW'S FUTURE

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paperperson

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Filling in the Gaps, Getting Ready for the Fall Party Season

posted on Jul 16, 2008 08:11PM

I do not swear by charts but I think visual analysis can be useful for gaining perspective on a stock. In this case, looking at Kodiak's chart somewhat philosophically, I would say that we are currently filling some gaps that occurred when the stock shot straight north last fall.

Looked at longer-term, that is a bullish event on a good stock like this one. The folks who were "waiting" to buy at 2.00 hereby have their chance. A few of the dumber-ass momentum players have probably left for good, and so on.

It is like opening all the windows and turning on the leaf blower, which is the way I understand one old man on Lake Lure in North Carolina would clean his house.

I hope you can link into at least one of the following. If not, you may wish to create your own two year chart of KXL on Yahoo and you will see what I mean about filling in the gaps.

http://finance.yahoo.com/echarts?s=K...

http://stockcharts.com/h-sc/ui?s=KXL...

On stockcharts, I can see that the on-balance volume held up well throughout this back-and-fill period. I interpret this as very positive.

I would have found today's KXL action scary and difficult to comprehend except that I experienced it on a number of other juniors I own. Colossus Minerals, Denison Mining, and New Gold are just three examples. As with Kodiak, these are stocks I am convinced have tremendous potential, for reasons of their own.

I think you had some momentum traders dumping gold and silver stocks, taking a quick profit on the POG move from 845 to 965, and going into the straight stock market (S&P, NASDAQ, DOW, etc) to catch the upside action. I think this was coupled with some who have a " gold-uranium-oil-coal-potash" type portfolio getting hit by the margin calls, as several participants have already alluded to.

There could be more of the same on Thursday and Friday.

I am convinced that this fall, we will look back at those days in July when Kodiak was under two bucks from a loftier vantage point. How lofty is anybody's guess. But my observation from past performance is: when this stock is ready to move, it does not fool around.

Some will be saying, why didn't I buy more. Others will be saying, boy am I glad I did.