DROOY is Cheap, But is Gold at the Top of its Game?
Jan 25, 2008 Technical Analysis
DROOY made a solid 17% rally today on increased volume breaking out from an ascending wedge pattern placing this stock on the map for technical analysis breakout buyers. With a forward earnings estimates of .51 and the Gold industry trading at an average earnings multiple of 42.28x earnings, this sets DROOY with an attractive fair value share price among its peers around double from its current pps 11.35 at (42.28 x .51 = 21.56). Although with Gold contracts looking extremely over extended its a tough decision to buy as gold is gonna hit a top sooner or later and endure a correction, which will have an impact on gold stocks, likely similar to the solar correction we are currently witnessing. No plan for buying at the moment but this stock looks bullish and fundamentals are in our favor. Lets feel this one out a little bit longer.
