Simmering Hope

Hope is the expectation that something outside of ourselves, something or someone external, is going to come to our rescue and we will live happily ever after. – Dr. Robert Anthony

Archive for October, 2009

Oct 21, 2009

Analysis of Ivanhoe Energy and UTS Energy Corporation

Taking a short break from gold stocks, I consider moving to energy ones.
Today it’s Ivanhoe Energy vs UTS Energy Corporation. Which one to chose for a short play?

Comparison chart for 5 years shows that overall UTS is a much better performer.

Price wise: October 21, 2009
UTS.TO trades at CAD 2.18 (- 0.06), IE.TO trades at CAD 2.73 (+ 0.02).

IVAN (Ivanhoe Energy traded on US Market) shows a 220% increase in short positions, with 0.3 days to cover. In my books that would translate into a bet that the following days the security will drop. Meaning that for a short play UTS.TO seems to be a better option.
On the daily chart, MACD is moving down on histo negative as well.
As a stock market newbie I got burnt a few times but one thing seems to be pretty clear: never bet against shorts.
As much as I dislike them I have to admit that most of the time they are doing their due diligence with regards to securities and more often then not, betting against them it’s not wise.
The old adage holds true: If you can’t bet them, join them.
I would not go that far as joining them, but I would avoid taking position in a security heavily shorted.

In conclusion: for a short and safe I would go with UTS, waiting for clarification on the pull back experienced today.
Ivanhoe Energy it’s still a good play before the shorts make their move or when it’s time for them to cover position.


Oct 20, 2009

Force majeure at Olympic Dam uranium mine

I have purchased shares on Denison Mine at a very bad moment, namely a day before the dilution, taking postion at $2.12 a share. Since then- that was sometimes in May if I remember correctly- I kept waiting for some good news to push the freaking price per share higher and to make a profit.
Maybe the bad news for BHP- the owner of Olympic Dam mine in Australia- would be the long awaited good news for Denison.
The Australian mine produces about 10% of global uranium and according to Reuter, BHP Billiton (BLT.L) (BHP.AX) plans to advise copper and uranium customers the mine will be down for an extended period because of damage to equipment at the main shaft which handles about 80 percent of Olympic Dam’s production capacity,earlier this month.

I guess it will be interesting to follow the next copper and uranium sessions, especially around Wednesday when BHP is expected to provide an update on damage.


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