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New Long Plays

Randgold Res. - GOLD - close: 22.35 chg: +0.70 stop: 20.99

Company Description:
Randgold Resources' focus is on the creation of value through the discovery and development of world class gold projects. (source: company press release or website)

Why We Like It:
The rise in crude oil helped spark a rally in gold stocks on Wednesday. Rising oil prices is seen as inflationary and gold is typically viewed as an inflationary hedge. It didn't hurt that the gold sector had been building a base over the last six-weeks. Today's move in the XAU gold & silver index is a bullish breakout through resistance at the top of this consolidation pattern and technical resistance at the XAU's 50-dma and exponential 200-dma. Meanwhile GOLD had been showing some relative strength against its peers with the October 13th rally and shares were consolidating sideways in a trading range until today. We would suggest new bullish positions with GOLD above $22.00. Our short-term target is the $24.50-25.00 range. We do not want to hold over the early November earnings report. That only gives us about five trading days. FYI: More conservative traders may want to put their stop loss near $21.50.

Picked on October 25 at $22.35
Change since picked: + 0.00
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume: 369 thousand

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IAMgoldCorp - IAG - close: 8.69 change: +0.23 stop: 8.29

Company Description:
IAMGOLD is a leading mid-tier gold producer listed on the Toronto Stock Exchange (TSX:IMG), the New York Stock Exchange (NYSE:IAG), the Australian Stock Exchange (ASX:IGD) and the Botswana Stock Exchange (BSE:IAMGOLD) with operations in Africa and South America. Our current assets include part ownership interest in five operating gold mines: 100% in Mupane Gold Mine located in Botswana, 38% in Sadiola Gold Mine, 40% in Yatela Gold Mine both located in Mali, and 18.9% in both Tarkwa Gold Mine and Damang Gold Mine, located in Ghana. IAMGOLD also has a steady revenue stream from its 1% royalty interest in the Diavik Diamond Mine in Northern Canada. (source: company press release or website)

Why We Like It:
IAG is another gold stock that looks poised to move higher. Now that the gold sector index is breaking out from a base we believe that IAG will follow it higher. Rising oil only improves the picture since gold is seen as an inflationary hedge. We're suggesting long positions now with IAG above $8.50. More conservative traders may want to wait for a move over $8.85 but if you do wait we'd suggest a tighter stop loss. There is potential resistance in the $9.20-9.25 region but our target is the $9.60-9.75 range. We do not want to hold over the early November earnings report.

Picked on October 25 at $ 8.69
Change since picked: + 0.00
Earnings Date 11/06/06 (unconfirmed)
Average Daily Volume: 572 thousand
 

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