Public trading strategy
Alamos Gold plunges after earthquake damage — buy the overreaction dip
Thesis
Natural disasters cause sudden panic, and Wall Street usually overreacts by dumping the stock immediately. While the earthquake is a real setback for Alamos Gold, the underlying value of the company's other mines and the gold they still have in the ground hasn't evaporated. When a solid gold mining stock plunges this hard in a single day, it often bounces back as cooler heads prevail and bargain hunters step in to buy the dip.
Strategy approach
Build a mean-reversion strategy that enters long on Alamos Gold (AGI) on the daily timeframe when the RSI(14) drops below 30 (oversold territory) and the price is more than 2 standard deviations below the 20-day Bollinger Band. Exit when RSI crosses back above 50 or after 10 trading days.