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The offices of Taseko Mines Limited is pictured in Vancouver, B.C., on Thursday November 25, 2010. (DARRYL DYCK/THE CANADIAN PRESS)
The offices of Taseko Mines Limited is pictured in Vancouver, B.C., on Thursday November 25, 2010. (DARRYL DYCK/THE CANADIAN PRESS)

Schizas’ Mailbag

Fast, nimble traders may like this mining stock Add to ...

Hi Lou,

Would you please comment on Taseko Mines Inc.? I have been a substantial holder for some time now, and my patience is waning.

I’m seriously considering jumping ship while there is still some value there. As always your comments are valued.

Thanks,

Jim

Hey Jim,

Thanks for your kind words and the assignment.

This will be the fourth time that I will conduct a study on Taseko Mines. The last examination was on Aug. 10, 2012, when the shares were trading for $2.72. Yves wanted to know if the shares represented a bargain. The research conducted on his behalf indicated that the shares had been in a downtrend since October of 2010 when it hit a high of $6.49. What was observed is that the stock has had brief but explosive jumps within the downtrend providing opportunities to trade the stock for profit. In addition it was advised that there was scant evidence to suggest that the shares were about to reverse the downtrend, which is what transpired over the last fifteen months.

Another investigation of the patterns on the charts will add more information that you can use to make a decision on your position.

The three-year chart depicts the selling that came into the market as the stock hit resistance near $3.50 in January of 2013, and the death cross that surfaced in April. The stock hit a 52– week low of $1.88 July of 2013 and has built a small base of support in the $2.10 range. The sharp move up in October of 2013 met resistance at $$2.75 and was followed by a pullback to $2.12 by mid-November. The RSI and the MACD both generated sell signals in late October.

The six-month chart provides a close-up of the sell signals provided by the momentum indicators in late October as the stock hit $2.75. At this point there are no signs that we can expect a trend reversal. What we can expect is that TKO will continue to provide trading opportunities that will be short lived and which will require a quick response when the opportunities are presented.

In terms of your particular involvement you should consider tax loss selling to offset gains you might have generated on other investments. Unfortunately the shares of base metal producers need rising prices for their output which just hasn’t been the case since October of 2010.

Have your own question for Lou? Send it in to lschizas@globeandmail.com.

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