Will Mining Penny Stocks Wake Up?

Goldman Sachs is Bullish on Gold


gold stocks Will Mining Penny Stocks Wake Up?Goldman Sachs recently came out with a bullish call on gold. Although many gold bugs and conspiracy theorists are calling for $2000 per ounce. Goldman’s $1300 target within 6 months should still be positive for gold stocks. Mainly because there are only four or five Wall St. firms that have the ability to change short term investor sentiment. For obvious reasons the boys at GS fall into that elite category.

The nine page report by Goldman states that gold is oversold and could benefit from quantitive easing. This potentially makes gold the main market moving catalyst again. Recently, oil has taken over as a guide to S&P 500 movement. The $80 level on oil has been a gauge for many traders decisions on whether to go long or short.

Gold going higher potentially offer penny stock traders multiple opportunities to make short term gains on the OTCBB. The price of the yellow metal can influence penny stock prices like no other commodity, mainly because of the large presence of mining stocks on the OTCBB and Pink Sheets.

For instance, Goldman also recently made a bullish call on coal stocks despite outperforming the market so far this year. They highlighted Peabody Energy (NYSE:BTU) and Massey Energy (NYSE:MEE) and a few others. Did this influence penny stocks ?
Not really, there may have been a stray recommendation here or there by a penny stock news letter, but there were no huge gainers to speak of.

This is because nothing attracts penny stock and microcap buyers like rising gold. The key is where to find these stocks that can potentially create massive gains. At this point a watch list should be put together and in addition to buying a large cap name in the gold space there is always room for a speculative name too. So stay tuned for a potential release of a gold stock from us. Hopefully we can ride the coat tails of the most prestigious firm on Wall St.


 

1:51 pm | Vanessa West | Tags: , | No Comments »

Goldman Sachs Is First Again

Prop Trading to Be Spun Off


goldman sachs Goldman Sachs Is First AgainThe is one thing that you can count on almost every time in the United States. It’s when the government tries to regulate or in this case over-regulate an industry, somebody smarter than them will figure a way around it.

The intention of the FinReg bill, which was signed into law last month was to curb speculation among banks. Once the bill was passed, most felt that it was just a matter of time before somebody found a loophole. Well yesterday, Goldman Sachs (NYSE:GS) figured it out.

CNBC’s Kate Kelly broke a story that Goldman Sachs could potentially spin off its proprietary trading unit this month. Shares of GS rallied sharply and mildly lifted the major indexes. The details of the move are still not etched in stone. However, the intention is obviously to separate it’s highly profitable prop trading unit from the bank. This will basically allow traders to exceed the 3% limit on investing tier one capital.

Now how does this impact investors ? It’s pretty obvious that most people would like to invest in a GS unit that is incredibly profitable, and is filled with some of the top minds in the industry. However, the details of the deal are still unknown. If Goldman’s move proves to be successful, other banks will surely follow.

On the other hand the move will probably only effect the OTCBB with positive sentiment. As we have mentioned many times in other blogs, penny stocks are impacted positively when the large caps in favor. The GS spin off could potentially spur a rally in the financials, which would surely lift major market averages. Consequently, some of those profits often find themselves trickling down into microcaps.

However, the OTCBB is an exchange that is skewed towards mining stocks, and biotech. Not financial stocks. Many mining penny stocks are linked to larger NYSE companies with their projects. Many of us have read about these relationships in various PR’s and penny stock newsletters. It is almost unheard of though, to see an OTCBB financial stock releasing news on some contract with a Morgan Stanley (NYSE:MS) or a JP Morgan (NYSE:JPM). With that being said, the prospect for hot penny stocks to develop off of the GS spinoff is slim. But as usual, be ready just in case.

 

1:18 pm | Vanessa West | Tags: | No Comments »

Is Goldman Sachs too Cheap?

Goldman Sachs News


goldman sachs news Is Goldman Sachs too Cheap?Goldman Sachs (NYSE:GS) reports earning on Tuesday, which always brings substantial interest into the large cap financial name. To many, it seems that the sentiment surrounding GS has changed to mildy positive, while the sentiment of its peer Bank of America (NYSE: BAC) hasnt been as strong. The company was just removed from the GS conviction buy list.

Goldman Sachs has rallied from a bottom of 129.50 mainly on it’s $550 million civil fraud settlement and it’s price relative to it’s $128.33 book value. Now it seems like support could be there at the 50 DMA of 137.81.

However when earnings come, throw all of recent press releases out the window. Shares of GS have always remained favorites (Both long and short) of hedge funds and day traders. These investors have made GS especially volatile and that volatility should increase this week.

The question is which way does the stock go? Unlike penny stocks, large caps like GS are much more sensitive to earnings. As we all know many hot penny stocks have provided huge returns with extremely negative earnings. That won’t be the case with shares of GS. Many are predicting that the recent settlement will have minimal impact on earnings, and the street will focus on core banking.

No matter what the result is, Tuesday’s trading should be volatile. So if you are not long yet and are interested, pick a price. Some are saying buyers will come in at the $142 level, but that remains to be seen. Once again, if you happen to go long, use a stop loss. Trading opportunities like this happen frequently, so always save some liquidity for future trades. This is just another example of why investors need to be aware and form large cap and penny stocks lists. Being prepared is part of the battle in trying to book massive gains.

 

10:09 am | Vanessa West | Tags: | No Comments »