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Trade alert for 7/6/10: Eldorado Gold (EGO)

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EGO oversold with a 4.47 RSI(2) and in a bullish trend above the cloud

Trade alert for 7/6/10: Eldorado Gold (EGO)

Company Description Eldorado Gold Corporation (EGO) is engaged in gold mining and related activities including exploration, development, extraction, processing and reclamation.

Relative Strength The relative strength for Eldorado Gold is positive. For 2010, the shares of EGO are up 15.81% as of mid-day on 7/6/10 while the broad market as measured by the S&P 500 index is down 7.18%.

Short-Term Reversion to the Mean Data

  • Stock: Eldorado Gold (EGO)
  • Price: 16.40
  • Trend: Higher (based on the price in relation to the Ichimoku Clouds indicator)
  • 2-day RSI: 4.47 (below 5 is oversold)
  • Risk: 2% of account equity
  • 20-day Average True Range (ATR): 0.697
  • 3 times ATR: 2.09
  • Target price: 18.49 (three times ATR plus the current price of 16.40)
  • Stop loss: 14.26 (current price of 16.40 minus 3 times ATR)
  • Position size: 15.69% (2% of equity risk divided by the 3 times ATR times the price)

Tuesday's Trading Strategy

Buy EGO at 16.40 with a target price of 18.49 and an initial trailing stop of 14.26. If the stock moves higher but has not reached the target price, the stop loss should be raised beneath the highest closing price.

For more information on this strategy and other profitable trading and investing strategies visit Grail Investing at grailinvesting.com.

Note: All articles are for educational purposes only. This information should not be interpreted as a recommendation to purchase, sell or hold any security at any time. Always consult with an investment advisor familiar with your financial goals before making any investment or trading decisions.

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