Next mining boom might be looming

ONCE again our market was sold down to the lower end of the months-long trading range only to recover by the end of last week to close again just below 5800 on the All Ords.

The market is still being strongly supported by many stocks from the mining and resource sectors.

It looks very likely we are seeing the beginning of the next mining boom and stocks from right across the price spectrum are joining the party.

Last weekend I looked at the charts for all the stocks listed on the ASX priced at 10c and under and found many with high enough volume for me to consider trading.

Long-term patterns are telling me they are on the verge of big moves to the upside. Some of these stocks have been asleep for years and have moved up over the past couple of months.

It is pretty obvious from the charts that there is some informed money being put into these stocks, as in many cases volumes traded have increased and prices moved up before any announcements have been made.

Last week, I discussed not being recently stopped out of many stocks on their initial stops. I should have learned not to speak too soon, as last week that changed and in one case with a vengeance.

I mentioned buying Big Un (BIG) on Thursday, August 31 and the details would be in this week’s column. Well I did buy 4000 shares at $1.50 at the open on August 31 for a total of $6020 and an initial stop of $1.36, which was a spike low formed on two occasions just prior to purchase. As it turned out the price fell after the open and continued down all day to close the day at $1.34.

As a result it was sold the next day, September 1, at $1.30 for a total of $5180 after brokerage. This was a loss of $840 on the trade in one day – not the best outcome, but sometimes it does happen.

I will, however, look at it again if and when it moves up to around $1.60.

On a brighter note, I bought a further 60,000 Lynas (LYC) at 18c on September 4 for a total of $10,830.

The LYC holding is now 100,000 shares and the stop has been raised to 14.5c.

The immediate target is 24c but I am looking to hold them for further moves to 30c and beyond. There is the possibility for LYC to have a big move to the upside.

I will discuss possible targets as the two above are reached, and provided they are not stopped out.

The stop on EML Payments (EML) had been raised to $1.81, the spike low formed on August 30, and it closed below that level on Wednesday and was sold yesterday. The details will be in next week’s column along with the details of the sale of Global Geoscience (GSC), which also closed below its stop on Wednesday and was sold yesterday.

Livehire (LVH) another tech stock and NRW Holdings (NWH), mentioned last week, both formed buy signals on Wednesday. I bought NWH yesterday.