Thursday, Feb 23, 2012
 
 

Today’s Big Stock: Seabridge Gold Inc. (NYSEAMEX: SA)

 

Seabridge Gold Inc. is engaged in acquiring, exploring and developing gold deposits. The company’s principal projects are located in Canada. Seabridge holds six properties with gold resources and its material properties are its KSM Project and its Courageous Lake Project. The KSM project consists of two contiguous claim blocks in the Iskut-Stikine region in British Columbia, approximately 20 kilometers southeast of the Eskay Creek Mine. The Courageous Lake project is a gold project covering approximately 67,000 acres located in the Northwest Territories, Canada. Its proven and probable reserves total 38.5 million ounces of gold and 10 billion pounds of copper.

Please take a look at the 1-year chart of SA (Seabridge Gold, Inc.) below with my added notations:

 

 

The most important level to watch on SA now is the $25 resistance (navy). You can plainly see how $25’s importance goes back as far as June of last year. A break above this level should mean higher prices for the stock. A potential support area for the stock might be on a pullback to the internal level of $23 (brown). Lastly, if SA were to suffer a more significant pullback, the $20 level (green) would be worth watching for a trade. 

The Tale of the Tape: SA is sitting below its $25 resistance. A long trade should be made if the stock breaks above this level, with a stop placed below $25. If the stock were to pullback to $23 first, a long trade could also be made in preparation for a potential breakout through $25. A break below $23 should signify a drop back down to the $20 level, thus providing another potential opportunity for a long trade.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key! 

Good luck!

Christian Tharp, CMT

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Christian Tharp, CMT

Want to know which trades to make, how to manage your stops and when to exit your trades? As a CMT with over a decade worth of experience in trading & mentoring traders, I'd like to offer you the opportunity to let me help you overcome all of your obstacles.

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