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Gold is taking a slight breather today after marching to a new all-time high Friday…Gold is essentially unchanged at $1,255.90 as of 7:50 am Pacific time…the CDNX is up 7 points to 1495…the Venture is clearly in a new uptrend and the first major area of resistance is 1560, right around the 50 and 100-day moving averages…if the CDNX is able to clear that hurdle, look out…we expect a powerful week for Gold Bullion Development (GBB, TSX-V) as the market begins to anticipate the first results from Phase 2 drilling at the Granada Gold Property…as outlined in our Week In Review And A Look Ahead yesterday, GBB’s Phase 2 results in theory and in general should even be better than Phase 1 as GENIVAR learned so much from that first 2,800 metres of shallow drilling in December and January…given the impressive Aukeko and Austin-Rouyn showings and historical workings to the east (approximately 2.2 and 3.5 kilometres respectively), and the favorable geology that runs right out to those areas on strike from GR-10-17, the LONG Bars Zone has become a massive target that clearly has the potential to host far more than the 2.4 to 2.6 million ounces already projected (non-43-101 compliant) within just the Preliminary Block Model…there are few opportunities like this, as we see it, in the market today…location is also a key aspect of this play as Granada is surrounded by all the necessary infrastructure for a giant open-pit operation…it’s also in a politically safe and favorable jurisdiction (ranked #1 in the world) for mining and exploration – Quebec…Gold Bullion is down a penny at 56 cents as of 7:45 am…Fire River Gold (FAU, TSX-V) is up 4 cents to 64 cents…the company is developing its Nixon Fork gold mine project in Alaska and came out with another impressive re-assayed historical hole this morning (498 g/t Au over 3 metres)…Fire River is starting a large drill program at Nixon Fork by month-end…in this strengthening market with higher gold prices, this stock should do very well…we’re keeping an eye on Seafield Resources (SFF, TSX-V) which should be releasing news soon on its Quinchia gold properties in Colombia…Seafield has dropped in half from where it was in late February and has done nothing over the last three months which partly explains our increasing bullishness on this stock…we believe a major turnaround in SFF is imminent…the stock is in a range of 16.5 to 18 cents in light early trading…

Once each week on BMR, our technical analyst will highlight one or more  resource stocks (outside the BMR Portfolio) that show very favorable chart patterns.  Investors/traders of course should perform their own due diligence and consider fundamental factors as well.  This weekly feature is merely meant to introduce some possible opportunities that investors may wish to investigate.   This morning, John takes a look at Mag Silver Corp. (MAG, TSX) which is certainly timely given the fact the odds of an upside breakout in silver have increased significantly over the past week.  MAG is unchanged at $7 as of 7:45 am Pacific time:

The outlook for Mag Silver is very bullish in the short term but it must overcome the main resistance at $8.50.

John: After slumping from a 52-week high of $8.26 April 26, Mag Silver (MAG, TSX) appears to have bottomed and consolidated.  On Friday it broke out of the consolidation to the upside.

Looking at the chart we see that a double top occured on March 25 and April 25.  The stock then retraced 61.8% to a support level of $6.59 and consolidated for a period of 7 trading days (horizontal blue lines).  Last Friday it broke out to the upside and closed at $7.

We can also see that it broke above its EMA(20) for the first time in nearly a month.  The EMA(20) provided support during the stock’s uptrend from February 22 to March 25 – this is bullish.

Looking at the indicators:

This is not a high daily volume stock but the volume last Thursday was relatively high and the breakout occured on lower volume Friday.  This is bullish.

The RSI has broken above the 50% level and is trending up – bullish.

The Full Stochastics %K (black line) has made a low definitive cross over the %D (red line) – bullish.

The Chaikin Money Flow (CMF) indicator has turned green above the zero line, indicating that buying pressure has overcome the sellers and is increasing.

Outlook: The outlook for Mag Silver is very bullish over the short term at least but it must overcome the main resistance at $8.50 to move toward its previous all-time high of $16.40.  Watch for a possible increase in daily volume this week and a continued move to the upside.

The BMR Portfolio

Gold Bullion Development (GBB, TSX-V)

Gold Bullion was up another 8 cents this week to 57 cents as it continues to strengthen in advance of the first set of Phase 2 drill results…it makes sense to us that results in Phase 2 will be even better than Phase 1…we’ve written about the “genius” of GENIVAR on this site before regarding their approach to Granada…the Phase 1 program, which was extremely effective and efficient and covered a wide area to test for “structure”, no doubt gave GENIVAR a wealth of information regarding the geological plumbing of this very large mineralized LONG Bars Zone system…they have used that new knowledge, we’re certain, to carefully and strategically plan the best locations for Phase 2 holes…2400 metres were drilled in the first 11 holes which means they’re going at least twice as deep in this round of drilling as they did in Phase 1…almost all previous holes ever drilled at Granada never went deeper than 150 metres…the early Phase 2 results could prove to be very interesting for the above mentioned reasons…we encourage investors to keep thinking “big” with regard to Granada and Gold Bullion because the geological facts are telling us to think big…this is the real thing and if all the analysts and the mutual funds are slow in figuring this story out and don’t come on board for a little while yet, that’s perfectly fine…they can buy their millions of shares at much higher prices…

Seafield Resources (SFF, TSX-V)

Seafield was given CDNX approval Thursday for its recently closed $3 million private placement at  17.5 cents…this stock is looking very, very interesting right now…what appears to have happened – based on the 10 million share day in May and this large private placement that Seafield didn’t have to do – is that some new “players” have come to the table, so to speak, with Seafield, in addition to Scott Paterson and some of his associates over the last nine months or so…this is what is commonly referred to in the industry as “broadening out”… expect Seafield to have plenty of market support over the summer…we love this story more than ever…the company is sitting on about $5 million cash in the bank…a major drill program is about to commence at its Quinchia properties in Colombia…Seafield has the right boots on the ground there…and one of their properties, Miraflores, has a NI-43-101 inferred resource of nearly 800,000 ounces with considerable upside potential…Seafield still has the highly prospective Picachos Property in Mexico and the Elora Gold Property in Ontario…Manitou Gold (MTU, TSX-V) is aggressively drilling the former Big Master Mine which is right next to Elora…the potential exists for some good results out of Big Master which would have an impact on Seafield…investors, therefore, need to keep a close watch on two fronts with SFF – Colombia and northwestern Ontario…technically, Seafield bottomed out at 16 cents last month and has formed a very solid base since then…it appears almost ready for a major rebound and a potentially explosive move…we also like the fact Seafield’s not drawing a lot of interest on the chat room boards right now…that’s a positive contrarian sign…Seafield closed unchanged on the week at 17.5 cents…

Sidon International (SD, TSX-V)

Sidon has now filed all the necessary paperwork with the CDNX regarding its letter of intent for an option to acquire the Morogoro East Gold Property in Tanzania…that paperwork includes a 43-101 report on Morogoro and the $750,000 private placement at 5 cents…we’ve done considerable research on Morogoro and if Sidon is able to move ahead with this project, and we see no reason why they won’t be able to, the blue sky potential is enormous…one only has to look at what Canaco (CAN, TSX-V) has done in Tanzania to understand that…Sidon jumped 1.5 cents this past week to 6 cents…

North Arrow Minerals (NAR, TSX-V)

North Arrow’s time is approaching…the company is expected to start drilling its Lac de Gras diamond property by the end of July/early August…the stock closed Friday at 18 cents, a half cent increase for the week…accumulation around current levels clearly makes sense for patient investors with at least a 3-month timeline…technically, the stock has exceptionally strong support at 16 cents which happens to be its 500-day moving average…North Arrow could receive a boost in the near future from drill results at its Beaverdam Lithium Property in North Carolina…this is a well-run company led by one of the very best in the business of grassroots exploration, Gren Thomas…Thomas has teamed up with Dr. Chris Jennings on North Arrow’s Lac de Gras holdings…Jennings is one of the world’s foremost authorities on diamond exploration and he and Thomas together discovered the very rich Diavik deposit in the Northwest Territories nearly 20 years ago…Diavik trends right through the centre of North Arrow’s property where Jennings has identified (through proprietary technology) 70 high priority kimberlite targets, only one of which has ever been drill-tested…

Kent Exploration (KEX, TSX-V)

Kent closed the week unchanged at 11 cents but is clearly attracting some bargain hunters…if the company is successful in completing a proposed $600,000 private placement (we say “if” because we’re taking nothing for granted with Kent right now), then the outlook for this stock will improve significantly…the infusion of cash would give Kent the opportunity to commence barite production at its Flagstaff Property in Washington State and also conduct a first phase drill program at its very promising Alexander River Gold Property in New Zealand…for the moment investors are negative on Australia where Kent‘s Gnaweeda Gold Project has immense potential…we’ve had some bad luck with Kent because of Australian politics, but we’re confident the company will rebound…

Richfield Ventures (RVC, TSX-V)

This stock is struggling to find its footing and get back on track but some progress was made this week as Richfield jumped 12 cents to $1.14…the stock found strong support, as expected, right at its rising 300-day moving average just under $1.00…technically, it’s likely to form a base around current levels for a little while longer…we remain very bullish on the prospects for Richfield, though, as it continues to drill its Blackwater Gold Project in central British Columbia…the 25,000 metre drill program that started in April has proceeded slowly and limited initial results have been okay but well short of spectacular…the company has received approval for a second rig (permits come from the B.C. government and that can often be a frustrating process) and this should help get the drill program going at a better speed…there’s every reason to expect some more outstanding drill results from Blackwater over the summer…it has all the potential to be a world class bulk tonnage deposit…

Colombian Mines Corporation (CMJ, TSX-V)

It was a quiet week for CMJ which was off 6 cents to 84 cents but on total volume for the week of only about 100,000 shares…an exploration update with new drill results can’t be far off, likely by month-end…CMJ is a valuable long-term hold with a large land package in Colombia where the company has strong ties…technically, the stock is resting just above its rising 200-day moving average…

Greencastle Resources (VGN, TSX-V)

Very little to report with Greencastle…long-term investors are wise to accumulate at current levels as VGN is essentially trading at cash value, but there are certainly better short-term opportunities in the market…at some point we expect President/CEO Tony Roodenburg will generate some excitement with Greencastle through a new deal or its Nevada gold property holdings…in the meantime the company is receiving approximately $120,000 per month in oil royalties from Primate which is enough to pay the bills and maintain a strong cash position…

Gold hit a new record high Friday and next week should be extremely interesting to see how Gold behaves and tests this breakout.  BMR’s technical analyst has a new short-term (4-month) target of $1,350 as explained in his chart update and analysis below:

Gold's chart pattern and indicators are bullish and point to an increasing Gold price with a short-term (4-month) target of $1,350.

John: The price of Gold (continuous contract) closed at $1,256.50 Friday after a record setting intra-day high of $1,260.30, reflecting the anxiety and uncertainty around the world seemingly in every phase of our lives.

The above daily chart shows an ascending triangle (green lines) formed over a period of 26 trading days starting May 12.  The top green line at $1,250 was a resistance barrier that was tested 4 times but Gold did not close above $1,250 during that period.  Friday that resistance was broken by a significant margin.

The test for this breakout will be if the Gold drops and bounces up off the $1,250 level, then the $1,250 level will be proven support.

What is the next Gold price target?  One reliable measure is to add the height of the triangle to the top horizontal line of the triangle.  In this case we have the height of $1,250 – $1,150 which equals $100.  Therefore it’s reasonable to suggest the next target is $1,350 ($1,250 + $100).

Looking at the indicators:

The RSI is climbing but is not in the overbought region – bullish.

The ADX trend indicator has the ADX trend strength line low and turning up, confirming the trend is getting stronger.  The trend is of course bullish because the +DI (green line) is above the -DI (red line).  Note the +DI is climbing and the -DI is falling, a very bullish scenario.

The Slow Stochastics has the %K (black line) crossed over the %D (red line).  The %K has a “W” formation below the 50% level and is still in the neutral zone below the 80% level – very bullish.

Outlook: The chart pattern and the indicators are bullish and all point to an increasing Gold price with a near-term (4-month) target of $1,350.

CDNX and Gold

It was a powerful and game-changing week for both Gold and the CDNX.  Gold surged to a new all-time high today of $1,263.50, closing at $1,256.50.  Its impressive technical momentum is certainly helping to drive prices higher.  Fundamentally, concerns over currencies and debt are giving fuel to this price surge.  And of course it doesn’t hurt that big central banks from emerging markets like China and India are buying Gold.  A move to at least $1,300, perhaps even $1,350, in the short term is quite probable before some more consolidation.  We’re not even close to a “bubble” in Gold yet as the general public still hasn’t jumped on the bandwagon and likely won’t for some time to come – they’ll pile in at the market top, as they usually do, and who knows where that could be ($2,000, $3,000?).  A confirmed new uptrend is underway with the CDNX which gained 28 points this week to close at 1488.  Volume picked up significantly today (121 million shares) which is another positive sign.  After a 6-week decline, the CDNX 20-day moving average is now rising which is highly significant.  The RSI has crossed over the 50% line which is also bullish.  And the Chaikin Money Flow (CMF) indicator shows that buying pressure is getting stronger.  All this tells us that the near-term target for the CDNX is around 1560 in the vicinity of the 50-day and 100-day moving averages.

Gold has broken out to a new record high this morning…as of 8:20 am Pacific time, Gold is up $14 an ounce to $1,259…bullish technical momentum is cited as the main reason for today’s move…it’s hard to imagine Gold not reaching $1,300 in the very near future…BMR’s technical analyst is reviewing the charts and will provide a fresh update on Gold later today…now is clearly the time to be positioned in the CDNX as a new uptrend in this market has been firmly established…Fire River Gold (FAU, TSX), which we first mentioned yesterday at 55 cents, is up another 6 cents this morning to 63 cents…Fire River is the type of stock that should perform extremely well in this market over the coming weeks…the company came out with more news this morning on its Nixon Fork gold mine project in Alaska, reporting 67 g/t Au over 6.3 metres on a re-assayed hole from 2007…Fire River is starting a 12,000 metre drill program at the end of the month…of course our favorite stock is Gold Bullion Development (GBB, TSX-V) which is currently unchanged at 58 cents…we’ll have more on GBB over the weekend…BMR continues to perform due diligence on Manitou Gold (MTU, TSX-V) which we have brought to investors’ attention recently…the company was just listed on the Venture Exchange in March and has raised over $5 million for exploration of its large land package in the Gold Rock mining camp of northwestern Ontario…the company is currently drilling the former Big Master Mine at its Kenwest Property…the stock closed at 38 cents yesterday…GoldCorp Inc. (G, TSX) owns just over 10% of MTU which has 27 million shares outstanding and approximately $5 million in its treasury…Seafield Resources (SFF, TSX) is sitting very quietly at 17 cents and has received CDNX approval on its recently completed $3 million private placement…we expect a move in Seafield prior to month end…the company should have plenty of exploration news to report throughout the summer as drilling operations commence at its Quinchia properties in Colombia…Seafield could also get a boost if Manitou makes a hit in its drilling at Big Master which is immediately adjacent to Seafield’s Elora Property…

As predicted, the CDNX is powering higher this week and the last nine trading days of the month are likely going to be very strong.  Numerous technical indicators are pointing to a significant early summer rally as John explains below:

John: The TSX Venture Exchange (CDNX) made a bold move to the upside today with an impressive gain of nearly 20 points (1.33%).  The move confirms the turnaround a few days ago at the 1445 level.

Looking at the chart, we see the strong support at 1445 (green horizontal line) and the Bollinger Band channel lines in a pincer movement indicating higher prices are imminent.  We can also see that today is the first time the Index has been above the SMA-13 (blue dotted line) since May 3, 2010.  This, along with a reversal to the upside in the SMA-20 after a 6-week decline, is a very bullish development.

The next two resistance levels are shown as blue horizontal lines.

Looking at the indicators:

The RSI has broken above the trendline (orange) and has also crossed above the 50% line – very bullish.

The Slow Stochastics has the %K (black line) crossing above the %D (red line) – very bullish.

The Chaikin Money Flow (CMF) indicator shows that buying pressure is getting stronger with the histogram (green) above the zero line.

Outlook: The CDNX responded today to a strengthening in the Gold price.  With the Bollinger Bands tightening, it appears a strong sustained move is upon us.  The Summer Sun Rally has just begun.  Enjoy.

Once each week on BMR, our technical analyst will highlight one or more  resource stocks (outside the BMR Portfolio) that show very favorable chart patterns.  Investors of course should perform their own due diligence and consider fundamental factors as well.  This weekly feature is merely meant to introduce some possible opportunities that investors may wish to follow up on.  This morning, John takes a look at a company called Barkerville Gold (formerly International Wayside) which trades under the symbol BGM on the TSX Venture Exchange:

Barkerville Mines has technically bottomed out and appears to be starting a strong move to the upside.

John: Barkerville Gold Mines (BGM, TSX-V) made a recent high of $1.40 April 15 and then sank to a low of 67 cents June 14.  Technically, the stock clearly appears to have bottomed out and closed yesterday at 74 cents.  As of 8:45 am Pacific time this morning, BGM is up another 6 pennies to 80 cents.  What’s happening here?

Looking at the 6-month chart we see that a Head and Shoulders pattern formed with the top of the head at $1.40.  But due to the immediate reversal I chose the effective head at the next resistance level below.  After forming the Right Shoulder the stock price broke down through the Neckline on May 18 and fell quickly to the low of 67 cents.  It has since bottomed out at the support level of 70 cents (green horizontal line).

I have also shown a resistance band (blue horizontal lines).

Looking at the indicators, we see that there is a divergence between the RSI and the stock price (mauve lines) and the RSI is climbing upward and very close to crossing the 50% line which can be interpreted as a buy signal.

The MACD has crossed over its signal line and has turned up toward the zero line.  This is very bullish.

The Chaikin Money Flow indicator is moving toward the zero line, showing that the buying pressure is accelerating.

Outlook: BGM has turned around and could make a strong move to the upside.  If it can overcome the resistance, and it appears that may be happening now, there should be no formidable resistance to at least 90 cents.  This looks very bullish.