Wednesday, June 29, 2011

Trade Update: HL

We went long on Hecla Mining Co. HL at $8.54, with a stop at $7.25. On Thursday, June 23
Hecla Mining Co. traded as low as $7.07 and we were not stopped out. Then its shares recovered and it went all the way up to $7.50 on Friday, June 24 before falling to $7.11 on Monday, June 27 and still we were not stopped out. In fact we did not get stopped out until Monday, June 27 when the shares went up to $7.29 and then fell back below our $7.25. So, the obvious question is why weren't we stopped out on Thursday morning June 23?

You can see the answer by looking at the intraday chart in the fifteen minute time period. On Wednesday, June 22 shares closed at $7.40, then on Thursday morning they down to open at $7.16, or nine cents below our stop, meaning that the stop was never hit. Then again on Monday morning June 27, Hecla Mining gapped open one penny below our stop and the stop was missed again. Finally midmorning on Monday the price recovered to $7.29, then it finally fell below $7.25 continuously and our stop was hit. So, the moral of the story is this, when the stock gaps below or above your stops they are not triggered!

I was beginning to feel that Providence was preventing us from around getting stopped out of this position and now that we have been I have to say we could regret it. The reason is because seven dollars has proven to be quite a strong some sort as you can see in the chart.Hecla Mining Co. HL began its run with a break above seven dollars last November and this could be nothing more than a retest. But all of this is just guessing at hypothesizing, for now we are out.

Buy full HL @ $8.54
Stop @ $7.25

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