New Play - NEM, BHP

The market attempted to recover from its recent fall yesterday. The market might just rebound and continue to rebound. However, I'm still bearish about the overall market. I would leave it to the Bulls to fight it out with the Bears. As most of the stocks have lost a fair bit from its highs, these stocks need to rebound before it can continue its downward trend. How much it recovers, is yet to be seen. The DOW might even reached all-time high.

In this rebound, I would play Call on the Mining and maybe Energy sectors only. My new play are NEM and BHP - both are mining stocks with a big chunk of gold play (among the biggest players in the world). I figure that should the market burst for good, gold stocks or gold mining stocks would have a good chance of appreciating further. China is also preparing a gold ETF for its citizens. A gold ETF (exchange traded funds) would be required to be backed by physical gold. Furthermore, the Chinese Government were also reported to have been advised to convert some of its US$ reserve to gold. As such, more demand for gold from China could be expected. Anyway, the charts for mining and gold stocks were showing bullish plays (e.g. stochastics crossover, low RSI, break 38.2 or 61.8% Fibonacci level, etc)

Even if the market did not burst, the mining stocks are due for correction.

I played NEM Jul06 52.5 Call and BHP Aug06 45 Call yesterday. My targets are their 52-week high and the stop-loss would be their last Monday's lows.

- PersianCat04 (Millionaire-in-progress)