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BMR’s technical analyst made another perfect call on Gold Bullion Development (GBB, TSX-V) last Friday.  In fact, his overall track record on this stock has truly been phenomenal.  Tonight, John has provided us with an updated GBB chart and a very bullish new analysis (“a very serious move to the upside” is in the works):

GBB is in a very strong technical position to make a serious move to the upside in the near future.

John: Gold Bullion Development opened trading today at 52 cents, briefly went to 51 cents, then climbed to 57 cents before finishing up a nickel at 55 cents on volume of 1.8 million shares.  The trading was of a controlled nature with no major spikes which provides stability for the stock.  This was the third consecutive day of up volume, indicating the stock is sitting on a firm base.

Looking at the 3-month daily chart, we see today that GBB broke out of the consolidation triangle (sloping blue lines) and traded as high 57 cents which is the Fibonacci 38.2% retracement level of the previous up move (i.e., from 35 cents to 71 cents).  This is a level of resistance and the only major resistance level between the close and the all-time high of 71 cents.

The support is firmly in place as we see the hammer reversal candlestick and the SMA(50) noted on the chart.

The RSI(7) has broken above the 50% level – bullish.

The volume today was nearly 3 times yesterday’s volume and confirms the strength of the breakout – very, very bullish.

The Slow Stochastics %K (black line) has crossed up above the %D (red line) below the 30% level and is heading higher – very bullish.

The ADX  trend indicator has the +DI (green line) crossing above the -DI (red line), resuming the bullish orientation that existed prior to the recent decline and consolidation.  The ADX trend strength (black line) has reversed its decline and is now ready to move up.  The ADX line is at the 31 level, thus the trend strength has plenty of room to increase without the danger of topping out.

Outlook: Gold Bullion Development is in a very strong technical position to make a serious move to the upside in the near future.

Gold Bullion Development (GBB, TSX-V) jumped a nickel today on nearly 1.8 million shares after the company issued an update on drilling progress at its Granada Gold Property.

We have spent most of the day reviewing this highly significant release and pouring through historical technical reports as well as all of our notes regarding Granada since late last year.  Today’s Gold Bullion release warrants a BMR special report which we will be posting at 6 am Pacific time tomorrow morning, prior to the market open.  In addition, BMR’s technical analyst will be taking a detailed look at the GBB chart which has turned quite bullish.

The LONG Bars Zone is shaping up exactly as we have been predicting at BMR – Granada’s potential as a multi-million ounce open-pit deposit can be seen more clearly than ever after today’s news.

Markets are up across the board with Gold ahead $18 an ounce to $1,216 as of 9:05 am Pacific time…the CDNX is up 12 points to 1382…major news has just come out regarding Gold Bullion Development’s (GBB, TSX-V) Granada Gold Property…we are still reviewing the release but it doesn’t take a rocket scientist to figure out that Gold Bullion’s Phase 2 drilling in the Phase 1 east-northeast discovery area looks extremely promising…our theory that Granada could contain in excess of 5 million ounces of gold as a major open-pit deposit has clearly been strengthened with the information the company has released this morning…4,000 metres of drilling in 17 holes has now been completed in the east-northeast area (9,000 metres in total) where Gold Bullion has intersected “multiple zones of altered feldspar porphyry, favorable for gold mineralization, along with some quartz veining in all directions surrounding discovery hole GR-10-17.  Visible gold has been observed in a few of the holes“…what this means is that GBB is hitting what it believes could be significant mineralization north, south, east and west of GR-10-17…GENIVAR is also about to drill the deepest hole yet at Granada – 365 metres vertical depth – 176 metres east-southeast of GR-10-17 to “confirm an extension of altered zones that have been discovered in other Phase 2 holes 75 metres to the northwest and southwest, respectively“…in addition to all of that, a second LONG Bars Zone – LONG Bars Zone 2 – has been identified 1800 metres east of GR-10-17 in an area covering a 1 kilometre long shear zone…“several northeasterly faults cross the shear zone and are considered prime targets for possible economic gold concentrations…numerous vein zones, hosted by both Granada Formation congolomerate and feldspar porphyry, have been delineated historically in LONG Bars Zone 2 through trenching with considerable visible gold noted…the auriferous veins reportedly widen with depth and occur in an east-west trend measuring at leat 1200 metres in length and 200 metres in width“...all of this is hugely significant and suggests to us that Gold Bullion is indeed on track for a possible major gold discovery at Granada in the order of 5+ million ounces…keep in mind that 2.4 to 2.6 million ounces have already been estimated (non-compliant) for the confined area of the Preliminary Block Model…Gold Bullion stated there are back-ups at the assay labs but the first set of Phase 2 drill results should be available in the near future…Gold Bullion is up a nickel as of 9:05 am Pacific time on nearly 900,000 shares…Sidon International (SD, TSX-V) continues to piggyback off excellent drill results from Canaco’s Handeni Gold Project in eastern Tanzania…Canaco drilled 37 metres of 12.45 g/t Au…Handeni has all the makings of a world class deposit and the stock is up 31 cents this morning to $1.39…Sidon, which is still waiting for CDNX approval of its letter of intent to acquire the Morogoro East Gold Property in Tanzania, is up one penny to 7.5 cents on over 2 million shares…we’ll have more on Sidon and Morogoro tomorrow…Richfield Ventures (RVC, TSX-V) continues to strengthen and is up 8 more cents to $1.26…Kent Exploration (KEX, TSX-V) has just released news as we write our Morning Musings…if we’re reading it correctly, Kent has posted the reclamation bond for its Flagstaff Barite Project…we’ll do some checking…Kent has been firming up recently and is now at 12 cents, up half a penny on the day…

Gold Bullion Development (GBB, TSX-V) has just come out with major news (shortly before 8 am Pacific time) which strongly suggests that gold mineralization is widespread throughout the Phase 1 LONG Bars Zone east-northeast discovery area.

“Drilling in this promising area has totaled nearly 4,000 metres (17 holes) so far and is consistently intersecting multiple zones of altered feldspar porphyry, favorable for gold mineralization, along with some quartz veining in all directions surrounding discovery hole GR-10-17.  Visible gold has been observed in a few of the holes.”

We are continuing to review the release as it contains a significant amount of detail including information regarding another potential discovery area – LONG Bars Zone 2, approximately 1800 metres east of GR-10-17.

This is highly significant new information, providing substantial further evidence that the Granada Gold Property has the potential to host 5+ million ounces of gold as a very large open-pit deposit.  More later today.

Once each week on BMR, our technical analyst highlights a junior resource stock (outside the BMR Portfolio) that shows very favorable chart patterns.  Investors/traders of course should perform their own due diligence, as always, and consider fundamental factors as well.  This weekly feature is merely meant to introduce some possible opportunities that readers may wish to investigate.   This morning, John takes a look at Victoria Gold Corporation (VIT, TSX-V):

John:  Victoria Gold Corp. (VIT, TSX-V) provided an update on activities in a news release June 23.  In that release the President stated, “Exploration drilling is in full operation at both the Santa Fe and Eagle Gold projects plus design and permitting is advancing on schedule at the Cove Gold Project.  The remainder of 2010 promises to yield exciting results on many fronts especially since the bulk of the company’s 2010 expenditures are planned for the second half of the year.  Victoria has approximately $20 million in cash.”

This company is worthy of further due diligence, follow up and inclusion on everyone’s watchlist.

Looking at the chart we see that VIT has broken out from a tight range between 64 and 66 cents and closed yesterday at 69 cents.  Recently it plunged down to 60 cents but reversed the following day and since then has traded in a horizontal consolidation channel.  The 60 cent level appears to be strong support.  It is trading below its SMA-50 (blue line) which is at the 75 cent level and this appears to be the next area of resistance.  The chart also shows the next major resistance level (horizontal blue line) to be at 85 cents.

Looking at the indicators:

The RSI has climbed out of the oversold region to the 54% level and is heading upwards – bullish.

The Slow Stochastics has the %K (black line) high at 80% and the %D (red line) climbing to 42% – bullish.

The Chaikin Money Flow (CMF) indicator has climbed above the zero line demonstrating there was buying pressure yesterday when many stocks and Gold were weak and the CDNX was flat at 1370 – very bullish.

Outlook: The past 2 days has seen some buying pressure and with an increase in volume this stock could start to move up.  With a full cash box and planned activities in the second half of 2010 on at least 3 sites, Victoria Gold Corp. certainly has the potential to be a very exciting stock through the balance of the year.

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Gold got as high as $1,211 overnight but has sold off over the last hour…as of 8:05 am Pacific time Gold is down $13 an ounce to $1,198…it has strong support on the downside at $1,185 and resistance on the upside around $1,230…Gold may trade within that range for a while…the CDNX is up 3 points to 1373…a move back up to 1,400 or a little better this week is certainly within the realm of possibility for the CDNX which has stabilized after the drop early last week to a new yearly low of 1343…Gold Bullion Development (GBB, TSX-V) is firm again this morning…it got as high as 51 cents and is currently up  half a penny to 50 cents…all things considered, we have every reason to remain extremely bullish on Gold Bullion – especially with the stock 30% lower than it was just a couple of weeks ago – with Phase 2 drill results just around the corner….the multi-million ounce potential of the LONG Bars Zone makes the risk-reward ratio here very attractive at 50 cents…Canaco Resources (CAN, TSX-V) is the volume leader on the CDNX so far this morning with over three million shares changing hands…the stock is up 14 cents to $1.07…Canaco reported a terrific intercept this morning from Handeni of 37 metres grading 12.45 g/t Au…we’ve mentioned Canaco here before at BMR as it’s developing the very promising Handeni Gold Project in Tanzania, not far from Sidon International’s (SD, TSX-V) proposed Morogoro East Gold Property acquisition…Sidon is up half a penny to 6.5 cents…Colombian Mines Corporation (CMJ, TSX-V) reported encouraging but not breakthrough drill results from its Yaramalito Property in Colombia this morning…the stock is quiet, down a penny to 79 cents on light volume…Yarumalito will take time to develop but it is an excellent target, one of several in CMJ’s large Colombian portfolio…

The BMR Portfolio

Gold Bullion Development (GBB, TSX-V)

Gold Bullion is clearly back on track after sinking as low as 43.5 cents last Tuesday to cap a 6-session slide that knocked it down nearly 40%…the stock finished the week at 49.5 cents, a drop of 5.5 cents…various factors contributed to the fall (technical, CDNX weakness, expiring warrants and investor impatience with lack of news or assay results)…the blue sky potential of the Granada Gold Property, however, remains as incredible as ever which leads us to believe the stock will recover in a hurry and ultimately reach new highs as Osisko did after a nasty 30% correction in its early days in September, 2005…investors need to keep focussed on some simple facts regarding Granada…the 2.4 to 2.6 million ounce estimate (non-compliant) for the Preliminary Block Model covers only half the strike length of the LONG Bars Zone as reported by Gold Bullion prior to the start of Phase 2 drilling…another very important fact is that GBB’s 2007 surface bulk sample (30,000 tonnes grading 1.62 g/t Au) removes a lot of risk that would normally be inherent in most exploration stories at similar stages…we can have much greater confidence in this growing deposit because of the large bulk sample which has given a very representative grade for mined material from Granada…in this type of mesothermal quartz vein deposit, assay results will normally underestimate the actual mined grade of mineralization which is why a bulk sample is so important…in this unusual case, Gold Bullion conducted a major bulk sample prior to starting any of its own drilling in order to confirm grade…in terms of assay results, they can’t be too far off…the first big batch of assay results from Phase 1 did not come until about 11 weeks after the start of drilling…it’s now 10 weeks since Phase 2 drilling started at Granada…

Seafield Resources (SFF, TSX-V)

We remain very bullish on Seafield and its Colombian properties…the stock has tremendous support at 16 cents and should be able to overcome resistance in the low 20’s as the summer progresses…Seafield has become a strong value play especially now that we have a much better understanding of its Colombian portfolio with nearly 70 square kilometres at Quinchia…the estimate of compliant and non-compliant ounces at Quinchia is approaching 2 million and Seafield’s market cap is only $16 million after Friday’s 17-cent close…BMR will be interviewing Seafield President and CEO Tony Roodenburg Wednesday morning to get his take on what could be in store for Seafield over the summer…

Sidon International (SD, TSX-V)

Sidon remains in a holding pattern and will likely continue that way until the CDNX accepts some recent filings by the company pertaining to its 5-cent financing and its letter of intent to purchase the Morogoro East Gold Property in Tanzania…the stock was unchanged on the week at 6 cents…

Richfield Ventures (RVC, TSX-V)

We identified 90 cents as a key support area for Richfield and indeed it did hold…after a 2-month slump, the stock appears to have turned around with short-term moving averages that have finally turned positive…Richfield closed the week at $1.20 for a strong gain of 22 cents…we believe this story will get a lot more interesting as the summer progresses and drilling intensifies at the Blackwater Gold Project in central British Columbia where Richfield is attempting to define a world class bulk tonnage deposit…

Kent Exploration (KEX, TSX-V)

The outlook for Kent has brightened considerably and the stock has enjoyed 3 straight days of gains after closing at a yearly low of 10 cents last Tuesday…Kent has increased its recently proposed financing to $900,000, $600,000 of which has already been closed and accepted by the Exchange…the situation in Australia regarding the Labour Government’s proposed “super tax” on producing mining companies has also improved, though the defeat of Labour in the upcoming elections is the best scenario for all mining and exploration companies in that country…Kent closed the week at 12.5 cents, a 2-cent gain on the week and its highest close since June 7…

North Arrow Minerals (NAR, TSX-V)

North Arrow remains one of our favorites due to the enormous potential of its large diamond property at Lac de Gras where drilling will likely commence sometime next month…North Arrow has traded in a tight range on limited volume over the last month (15 to 18 cents) but interest should really begin to pick up in this stock as drilling draws closer at Lac de Gras…this is an excellent time to get positioned in this quality company but there’s certainly no need to be chasing NAR at the moment…the stock closed Friday at 17 cents for a loss of one penny on the week and a market cap of only $6.5 million…

Colombian Mines Corporation (CMJ, TSX-V)

CMJ is looking good from a technical standpoint and we remain very bullish on its large portfolio of gold/copper properties in Colombia…as expected, the stock found great support at its rising 300-day moving average of 60 cents…CMJ got as low as 62 cents Thursday and recovered strongly to close the week at 80 cents, just a 3-cent drop from the previous Friday…new drill results from Yarumalito are expected soon…

Greencastle Resources (VGN, TSX-V)

All remains quiet on the Greencastle front…VGN was up half a penny on the week to 12 cents…it’s impossible to predict when Greencastle may start moving again but one thing is certain – this stock has always proven to be a great buy when it’s trading at cash value as it is now…

CDNX and Gold

The CDNX plunged to a yearly low of 1343 early this past week but appears to have stabilized and could be ready for a rally after reaching deeply oversold technical conditions.  The Index jumped 17 points Friday, albeit on light volume, to finish the week at 1370, a 15-point decline from the previous Friday.  Only time will tell if we’ve seen the bottom of this market yet (the CDNX is off 19% over the last 48 trading sessions since this slump began), but a rally (likely to as high as 1440, an area of previous support) seems to be underway.  Selling dried up on the CDNX this past week as soon as the Index fell slightly below its rising 300-day moving average.  Based on historical patterns, it’s reasonable to assume the CDNX will find a bottom not too far below its 300-day M.A., similar to what occurred each year from 2003 through 2007.  Since the 200 and 300-day SMA’s continue to advance with no significant threat of going into decline anytime soon, we must continue to take the view that what we’ve witnessed over the past 2+ months is merely a sharp correction within an ongoing bull market that could very well hit new highs later in the year.  Gold showed some resilience this past week, briefly dipping below $1,190 before recovering to close Friday at $1,211.  Over the past 10 years, the months of June and August have been the worst for Gold.  Based on seasonal patterns, therefore, we should be prepared for some further weakness or consolidation in Gold before new highs in the fall.