Monday, November 23, 2009

Alert: HL

Take a look at the daily chart of Hecla Mining company. You can see how the price is getting very far north of the 100 day moving average signaling an overbought condition. Now I am not saying that the stock will sell off, but the farther the price gets from the hundred day moving average the more the risk is. An overbought condition is also singled by the stochastics, but they are not as significant in a trend.

Without arguing that the stock will or will not do, I will tell you what I will do in case of the selloff.

We are along 25 shares at $9.13 and long 75 shares at $2.03 for cost basis of $3.08. With Hecla Mining (HL) closing at $6.26 in Friday we have more than double so I'm going to place a stop at that little area of congestion between five and six dollars, or all say $5.25.

So now we can preserve our profits but remain in if it continues going up.

Look for the volume to diminish as a signal to a pull back.

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