Base Metals qstn

[dolphin38]

Guys Ive been a long time reader on this forum but almost a "posting virgin" , as with only 2 trips under my belt to Thailand I can't offer much that hasn't already been said or asked about Phuket.
But I have seen that some of you guys are independantly comfortable and may be able to offer some investment advice.
Based here in Oz I've got a humble portfolio of equities and have focused particularly on biotech for long term growth and base metals.
I hold Zinc (ZFX/KAL) and Nickel MCR/JBM) in particular and was wondering whether you guys had any views on the medium term trend.
I feel Nickel will continue its run up to some US$22/lb and Zinc will probably take a breather back to some us$1.70/lb...but wasnt sure if my view was consistent with some of you who must be trading from Thailand, and hence be getting a more international view of the news.
Ive thought about cfds but prefer to risk only what I can afford and dont want to leverage that up.
Any views out there?????

[K2]

Hi and welcome D38.

Not sure that I would base my investment decisions on what I read on a public Forum about Phuket, rather I would look at research out of quality analysts or better still do your own.

As a more technical (chart) trader I am expecting a longish (6 months +) so consolidation for base metals (and precious metals too) to continue to unwind the run-up over the last 3 years+. The secular bull market is intact so would look to buy/add on dips.

Stock market as a whole is expensive and in need of a substantial correction (15%+ drop) so would choose stocks with some caution into Q3.

All the best - K2

[LivinLOS]

I am a bit of a fan of zinc based on depletion of reserves currently quite a rapid deficit and so a crunch situation exists.. The rest of the baqse metals not so sure..

As to the consolidation in precious metals based on chartist thoughts.. what about the 3 stage decending fan in gold ?? Isnt that a major bullish signal showing weakening sales pressure ??

There are a couple of important points to note about these fan corrections. The first is that what they are is a succession of progressively less steep downtrend lines that contain the price, and indicate a diminution of selling pressure over time - by the time the fan correction ends with a breakout such as we saw last week, significant selling pressure has quite simply been exhausted.

I am not a chartist type more looking at the geo political side.. Tho try to see as many sides as possible..

[K2]

Thanks for the chart Seft -

Just of note - I really appreciate LiL's views because the way you look at the world/markets is fresh and not coloured with 'industry' gobbledy-gook.

OK my technical view on Gold - (for what it worth) -

As long as hold $600 - bull trend stays intact - break here would have to re-assess view. I think we will go back and retest the highs but most likely not break to significant new highs this time - in Elliot this looks like major 'wave B' and then expect move back down to $600 - 'wave C' - thereafter Q3? expect major bull trend to comence.

(Note: Doller Index has negated its downtrend and looks to strengthen further).

[dolphin38]

K2 and LIL,
thanks for your views.
I try and read as much as possible on local financial forums and participate in a few financial chat rooms based here in Oz, but its always great to get opinions from as far afield and as diversified as possible....and you guys are no financial dummies having set yourselves up to be able to live in PARADISE!
K2 I agree with you on medium term metal correction and I think it has already started, but Nickel in my mind has broken out of a medium term ascending triangle and if I was purely a chartist, Id say its predicting a jump in price of Nickel by another 30%+.
Nickel is in a pretty unqiue situation at the moment with all time inventory lows, and massive production issues across the sector.
Besides, by the quality of your responses youve proven yourself wrong K2, this forum is even good to gather alternative financial views(not that I'd base my investment decisions on anyone else opinion only)... on top of lots of experience sharing and stories re Phuket life.