In May/June time frame everybody was promoting Redstar Gold like mad.

–http://goldstocktrades.com/blog/ a blog of a newsletter writer that promotes stocks for a living, promoted RGC agressively

-Same positive comments about RGC were published   by Byron King, a well-known newsletter writer that put a 0.20 target on RGC due to technical chart breakout.

 

Fast  forward 2 months later and stock has halved.

 

 

Why the big sell off? RGC is not a bad company, on the contrary, but drilling results were disappointing and valuation left no room of error, even after the big correction market cap is at 20 million+, still not cheap for an explorer without any proven ounces!

 

So before looking at a junior promising chart, I believe it is better to look at valuation of a company too! Same like NXS last year at 0.34 it was fundamentally not cheap. Same for Novo and so many other success stories, you better buy at bottom levels (like current level  for RGC?) , but better not buy a technical breakout level and you better never buy based on newsletter writers opinion, as they all position long time before writing up a story and eventually sell, but will never communicate about this.

 

Of course this does not mean I do not look at technicals as a weak looking chart is not a buy signal either, so it remains a balancing act with both valuation and technicals taking into consideration.

 

I prefer to buy an explorer at 10-20M valuation, with at least some ounces already proven. As always do your own due diligence and do not rely on promotional newsletters.