In the past couple of weeks or so, Laramide Resources has dramatically risen from $12 to $16, but the stock price could be about to experience a short term correction.

If we take a look at the chart above, one can see the Laramide has almost risen vertically up $4.00 a gain of 33% in a matter of weeks, something that we should all be very pleased about. Laramide has also recorded an incredible gain of over 164% since we recommended it at under $6

However the stock looks as if it will come back slightly from these highs. Long term, we are of course still bullish on Laramide as well as the rest of our uranium stocks, but this spike in the share price may present a temporary correction in the stock price. Therefore one could sell a proportion, say 50% of any LAM holdings and buy those same shares back at a lower price. Long term Laramide is set to go a lot higher, but this just may be a opportunity to make a few dollars profit. However one is equally wise to ride this temporary period of volatility out and focus on buying and holding for the long term growth in the stock price and the profits that we feel should come with this.

Technically, the RSI has been well above 70 and is now coming back down. The MACD is also looking overbought and peaky as well as the STO which is currently around 90, in the overbought zone, suggesting a sell signal.

We could of course have called this wrong, and it is additional risk to sell now, instead of holding for the long term. In the long term of course, uranium is set to go a lot higher and should take the Laramide stock price with it. The sale of 100,000 lb of uranium in a sealed bid auction next week could take Laramide still higher, but it is likely that some uranium stocks will get sold off in the classic “buy the rumour sell the news” theory.

Good luck with your decision whether you decide to sell 50% or some other proportion of your holdings or if you choose to ride this one out.

We have decided to hold and ride out any correction that may come along.

30 March 2007