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October 11, 2010

The Week In Review And A Look Ahead: Part 2 of 3

The BMR Portfolio

Gold Bullion Development (GBB, TSX-V)

It was a relatively quiet week of trading for Gold Bullion which is not at all surprising considering the stock remains in a consolidation phase and a financing is taking place…the stock closed unchanged for the week at 57 cents on total CDNX volume of just over 3 million shares…GBB continues to find tremendous support at its rising 100-day moving average of 55 cents…the stock is looking stronger technically and a reversal in the 20-day moving average appears imminent (likely during the week of October 18 which would probably coincide with the closing of the financing) and would signal the start of a new uptrend…drilling continues in the LONG Bars Zone and we expect the company to outline plans for a large Phase 3 drill program soon after the closing of the financing…we have every expectation that Gold Bullion will deliver even better drill results in the weeks ahead based on the visuals reported over the summer…a lot of assays will be pouring in through the remainder of the year as to date we’ve seen results on only about 15% of what has been drilled in Phase 2…the fact Gold Bullion has increased its financing from $6 million to $8 million underscores the demand for this stock which has been one of the best performing companies on the CDNX this year…we expect that trend to continue into 2011 as drilling intensifies in the LONG Bars Zone and as results confirm the magnitude of this very large mineralized system…Gold Bullion is up 714% since we introduced it to BMR readers last December at just 7 cents…

GoldQuest Mining (GQC, TSX-V)

GoldQuest has been a star performer since we introduced this company to BMR readers just under 20 cents late last month…GoldQuest jumped a whopping 48% last week, moving from 21 cents to a Friday close of 31 cents on total CDNX volume of nearly 6 million shares…what’s driving GoldQuest is a growing realization of the value of the company’s assets in the Dominican Republic and Spain…just over 3 years ago this stock got as high as $1.80 per share for a total market cap of approximately $100 million…the CDNX was around 3000 at the time but GoldQuest also has much more going for it now than it did back in 2007 including a substantial zinc-lead-silver deposit in Spain…late last year GQC acquired a 100% interest in numerous projects in the Dominican Republic which were part of a joint venture the company had with Gold Fields…the major had invested over $6 million in these projects (including 13,000 metres of drilling on seven different properties)…in return, GoldQuest issued 8.6 million shares to Gold Fields along with a 1.25% royalty interest…GoldQuest has been active in the DR (home of one of the world’s largest gold deposits, Pueblo Viejo) for nearly a decade and they have assembled several advanced-staged exploration projects there including Las Tres Palmas (excellent recent drill results) and Las Animas which has a 43-101 indicated and inferred resource of 129,000 ounces of Gold, 2.5 million ounces of silver, 106 million pounds of copper and 130 million pounds of zinc with potential for considerable expansion…the company also now holds the Toral zinc-lead-silver deposit in northwest Spain which is targeted for production and has an historical non-compliant resource estimate of 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag…a 43-101 is currently being prepared on Toral…the deposit remains open along strike and at depth…Lundin Mining (LUN, TSX) has a back-in right for up to 65% of Toral if it meets certain commitments including the funding of a feasibility study, but the bottom line is that with even 35% GQC has a company-building asset in Toral…GoldQuest has also secured a second polymetallic project a short distance from Toral and with similar characteristics…further details on this will be announced by GoldQuest after full title has been received from the Spanish authorities…technically, GoldQuest has broken out of a 2-year consolidation phase – a very bullish development…we encourage BMR readers to do their due diligence on this one and think “big” with GoldQuest as it has a very real opportunity to become a producer and make a potential major discovery in the DR…

Excel Gold Mining (EGM, TSX-V)

BMR was very pleased to add Excel to its portfolio near the end of last week with the stock sitting at 16 cents…we’ve been watching this company very closely since a volume breakout on the stock in May and June…we visited Excel’s Montauban Mining Camp project last August and completed our due diligence just recently by reviewing hundreds of pages of historical information on Montauban and speaking with a geologist very familiar with the project and the area…we’re currently finalizing a major report on Excel which we’ll be posting in the coming days…in a nutshell, Excel has acquired the former Montauban Mine, approximately 100 kilometers west of Quebec City, and a large land package surrounding it…we’ve stated this many times before – often the best place to find a new mine is near an old mine…Montauban was mined mostly for zinc and lead but also for some Gold and silver in the first half of the 20th century…in the 1980’s, Muscocho mined an area (the North Gold Zone) adjacent to the main sulphide deposit…there is also a South Gold Zone which has received little attention…Montauban is a large structure (approximately 3 kilometres in length) and we are certain there are extensions to this structure…hydrothermal remobilization and sulphide melting appear to have been the most important mechanisms for controlling the distribution of Gold and silver…the reason we’re so bullish on this property, and therefore the company, is that there are not only significant remaining reserves that Excel could rather quickly exploit if it so chooses but we believe there’s an immense amount of untapped potential with Montauban (just like Granada) that previous operators either overlooked or just couldn’t get around to uncovering…for the first time ever, all the historical drill data (some 900 holes) and other important pieces of geological information on Montauban (from the work of several companies) are being compiled into one database…Excel’s geological consultants are completing a Gemcom overview of the underground structures at Montauban in advance of a large drill program expected to start soon and designed to quantify existing reserves and discover new resources…there are also some highly prospective targets outside the former mine area, particularly north of the North Gold Zone…this is an advanced project with enormous exploration upside…the stock was up a penny for the week at 17 cents and has 113.5 million shares outstanding for a total market cap of $19.3 million…Excel is a major turnaround story in the making that the general market hasn’t picked up on yet which is exactly the kind of situation that we love to bring to the attention of our readers for their due diligence…EGM’s chart is extremely bullish and includes a recent reversal in its 300-day moving average after a decline that started nearly 5 years ago…

Richfield Ventures (RVC, TSX-V)

Richfield has been consolidating recently, unwinding a temporarily overbought condition that emerged last month when the stock ran as high as $3.05…RVC was off 5 cents for the week at $2.75 where it has rock solid support at its 20-day rising moving average…if you look at the Richfield chart, you’ll see that it has repeatedly bounced off its 20-day SMA since the 20-day reversed to the upside in early July…Richfield has jumped 129% since we introduced it to BMR readers last December at $1.20 but we believe there’s plenty of upside remaining, especially with Gold above $1,300 an ounce…the company has nearly $20 million in the bank and has a fully winterized camp in place for aggressive continued drilling of its Blackwater Project in central British Columbia…Richfield’s current market cap is approximately $100 million, well below what the potential takeover price for this company could be if it’s able to prove up a resource of several million ounces as seems very probable given the excellent drill results they have delivered to date…we don’t believe President and CEO Peter Bernier is in this to turn Richfield into a producer…we believe Blackwater will ultimately end up in the hands of a major…

October 10, 2010

The Week In Review And A Look Ahead: Part 1 of 3

CDNX and Gold

The CDNX climbed for an 8th consecutive week, hitting a new 52-week week high of 1789 as it continues its march toward a resistance band between 1900 and 2000 that we recently explained in detail.   This is an incredibly powerful market, fueled by good exploration news on many fronts, an historic move in Gold and rising commodity prices in general.

The amazing strength of the CDNX was very much in evidence near the end of the week.  The Index gapped up and hit 1789 in early trading Thursday before a reversal set in as Gold corrected by over $30 an ounce.  The CDNX fell 34 points to 1755 but buyers quickly stepped up to the plate, as they have been doing all along on any kind of a pullback, and the market regained some of those losses before powering ahead 19 points the following day to close the week at 1785.

Over the past 8 weeks the CDNX has jumped 22.5%.  The trend is your friend.  Even though this market is overbought, one must keep the big picture in mind – we’re in the midst of a massive move of historical proportions in junior gold and mining stocks in general – and the CDNX seems determined to test the 1900 to 2000 resistance band (in the immediate vicinity of its 200-week declining moving average) before a pause and a minor short-lived correction are likely to set in.  In many ways this is the reverse of 2008.  By the spring of next year we could easily see the CDNX 50% higher than where it is now.  A lot of money remains on the sidelines, average investors – many of them still smarting from the crash 2 years ago – have not yet caught on to what’s happening in the Gold market and with these junior stocks, and the CDNX still has a lot of catching up to do.  Just three years ago the Venture was trading as high as 3300 with Gold $600 lower than it is now.  When the “Mania Phase” finally kicks in, the hysteria surrounding Gold mining stocks may even surpass that of the “dot com” craze a decade ago.

Gold hit a new all-time high of $1,365.70 last week and closed Friday at $1,347 for a $28 weekly advance.  Gold has climbed exactly $100 an ounce over the last 4 weeks with weekly gains of $28, $22, $27 and $23, respectively.

There are many reasons for the current flight to Gold and why the yellow metal could ultimately exceed $2,000 an ounce, not the least of which is that Gold is being increasingly being viewed as an alternative currency.

Speaking of currencies, the U.S. Dollar continued to get pummeled last week and what we’re really witnessing right now is a growing list of countries (the United States included) that have either recently intervened or are currently trying to force their currencies lower to gain some sort of economic advantage.  It’s impossible to predict all the consequences of this global “race to the bottom” or “currency war” but one of them is very likely much higher Gold prices.

In the coming few weeks we’ll be exploring in greater detail the global macro picture and why it makes so much sense to be hugely bullish on Gold and commodities in general.  As investors we have some incredible opportunities in front of us at the moment.

Happy Thanksgiving To Our Canadian Readers!

On behalf of the BMR crew, I wish you and your family a very happy Thanksgiving.  It is a great time to reflect on the many blessings in our lives.

With this exceptionally strong market, many of our readers have seen their portfolios increase in value substantially this year.    My challenge this Thanksgiving to each and every one of you is to think of a good cause to contribute to financially.

The Apostle Paul writes, “You will be made rich in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God” (2 Corinthians 9:11, New International Version).

We are all called to live generous lives and to be a blessing to others.  From our house to your house, God bless you all on this Thanksgiving weekend.

Terry Dyer

Owner/Publisher

Langley, British Columbia

www.BullMarketRun.com

October 9, 2010

Excel Gold Breakout Appears Imminent

After a great deal of due diligence that included a site visit in late August, discussions with geologists and a comprehensive review of publicly available historical information pertaining to the former Montauban Mine in Quebec, BMR was very pleased to add Excel Gold Mining (EGM, TSX-V) to its portfolio yesterday at 16 cents.  We have been watching this company closely over the last number of months since a volume breakout in May/June. Excel has an exceptional property and the right people to succeed in a huge way during this historical bull market run in junior gold and mining stocks that we expect to intensify in the coming months.  Montauban is a former and significant base metal and gold and silver producer with major untapped potential that we believe is about to be unlocked.  It’s exactly the type of company we like to uncover at BMR – overlooked and undervalued with massive upside potential (the average gain in the BMR Portfolio over the last year is nearly 175%).  In the coming days we’ll be reporting more on the fundamentals that we expect will ignite EGM.  In the meantime, as part of your due diligence, we urge to you to examine the very bullish EGM chart below along with John’s comments:

John: On Friday EGM opened at 15.5 cents, its low, and then during the day it climbed and closed at its high of 17 cents for a gain of 1 penny on total CDNX volume of 385,000 shares (75,000 on Alpha).

Looking at the 6-month daily chart we see that starting on June 25, EGM began trading in an upsloping channel which then developed into a horizontal trend channel when the upsloping trend channel trendline was broken as noted on the chart. Trading has continued in the horizontal trend channel between 14.5 cents and 18 cents until Friday. During this time the stock has consolidated and the volume has declined as required for a valid consolidation.

The last 4 trading sessions have shown a slightly higher upside volume with the stock price gradually rising during the week. Note that at the beginning of September there was an attempt at a breakout to the upside (thin blue vertical line) – a price rise with increased volume – but this failed. We don’t expect it to fail this time and a move above 18 cents on high daily volume of greater than 2 million shares would confirm the breakout that we’re anticipating here.

Looking at the indicators:

The RSI has broken above the 50% level and is at 56% pointing up – bullish.

The Slow Stochastics has formed a large “W” formation and the %K (black line) has broken above the %D (red line), low down with both climbing – bullish.

The Chaikin Money Flow (CMF) indicator shows how the buying pressure declined during the consolidation (mauve line) and then how it reversed and increased on Thursday and Friday to break into the green – bullish.

Outlook: EGM’s 2.5-month consolidation appears to be coming to an end. The volume has declined throughout as required and has recently strengthened. There is every indication that will see a serious and imminent attempt at an upside breakout above the 18 cent level.  The chance of that succeeding is very high based on the overall strength of EGM’s chart and the bullish fundamentals that are in play here.

October 8, 2010

BMR Morning Market Musings…

Gold is rebounding after yesterday’s sell-off which, as we mentioned, was healthy from a technical standpoint…a weaker than expected U.S. jobs report this morning has driven the greenback lower again and precious metals and commodities in general higher…as of 8:45 am Pacific, Gold is up $12 an ounce to $1,346…Silver has jumped a whopping 71 cents and is now at $23.21…the U.S. economy shed more jobs in September for the 4th straight month…there was some private sector job growth but it was less than expected…also, a preliminary benchmark revision estimate indicated employment in the 12 months to March had been overstated by 366,000…there can be no doubt that the Fed will engage in another round of quantitative easing…the U.S. Dollar is likely to remain under pressure for the immediate future which seems to be part of the Fed’s strategy…the Dollar Index is down slightly to 77.34 but is off its lows of the day…the CDNX, after some profit taking yesterday, is surging again today…the Venture is currently up 14 points to 1780…BMR has added Excel Gold Mining (EGM, TSX-V) to its portfolio…we have mentioned Excel occasionally over the last few months and we have completed additional due diligence after visiting the company’s Montauban Property in late August…Montauban is a former gold, silver and base metal producer located approximately 100 kilometres west of Quebec City…there are historical (non-compliant) reserves at Montauban plus considerable potential for expansion throughout this system…the North Gold Zone (there is also a South Gold Zone with the massive sulphide base metal deposit in between) was mined by Muscocho in the 1980’s but only to a depth of 80 metres…it remains open along strike and at depth and also includes silver and base metals…Excel has secured a large land package around the former Montauban mine and there are some interesting targets well outside the current deposit for the company to pursue…Excel is in the process of compiling an incredible amount of historical drill data and other geological information on the past producing areas of Montauban which cover a length greater than 2 kilometres…from a technical standpoint, Excel has completely unwound its overbought condition from the summer and is trading in an area of strong support, just 2-3 cents above its rising 100-day moving average…the risk-reward ratio at current levels is very attractive with the stock’s current market cap at $17.5 million…we’ll be reporting more on Excel in the very near future…the stock is currently off half a penny to 15.5 cents…GoldQuest Mining (GQC, TSX-V) is up 3 cents to 30 cents…this is another company we are tremendously excited about…GoldQuest has been active in the Dominican Republic for nearly a decade and has advanced stage and grass roots projects in three separate districts…the DR is a country rich in mineralization, it’s mining-friendly and hosts one of the world’s largest gold deposits – Pueblo Viejo – with over 20 million ounces…GoldQuest also has a zinc-lead-silver project in Spain that was acquired from Lundin Mining (LUN, TSX) with an historical estimate of 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag…it remains open along strike and at depth…a 43-101 compliant resource estimate is currently being prepared from over 40,000 metres of historical drilling…GoldQuest also has another polymetallic project in the works very close to Toral…GoldQuest is currently up 3 cents to 30 cents and has hit a new 52-week high…Gold Bullion Development (GBB, TSX-V) is up a penny at 58 cents…we expect things to heat up very soon with GBB once its $8 million financing is complete…

October 7, 2010

BMR Morning Market Musings…

Gold exploded to a new all-time high this morning, reaching $1365.70, before pulling back quickly and sharply on profit taking…as of 9:15 am Pacific, the yellow metal is near its low of the day, off $15 to $1,334…this type of pullback, $35 in a matter of hours as Gold hit a low of $1,331, is normal and healthy…it actually helps sustain this incredibly strong run…the U.S. unemployment report comes out tomorrow and those numbers will be watched closely by the markets…the U.S. Dollar’s weakness continues…at 77.38, the greenback is closing in on critical support at 76 on the Index…we definitely appear to be in the midst of a slow but steady devaluation of developed countries’ currencies vs. emerging world currencies such as China, India, Brazil and Russia…appreciating the growing importance of these emerging markets is critical to understanding what’s driving this bull market in precious metals and commodities in general…the CDNX followed Gold’s pattern this morning, reaching a fresh 52-week high of 1789 before pulling back…the Venture is currently at 1761, down 13 points for the day…we expect the Venture to make a run to approximately 1950 before year-end, and perhaps even within a month, which would put it in the immediate vicinity of its 200-week moving average (the crash of 2008 began in earnest after the Venture fell through its 200-week SMA in early July that year)…the TSX Gold Index hit an all-time high of 412 this morning and has since dropped back to its 20-day moving average at 400…interestingly, the Gold Index is far from being technically overbought and a very powerful move to the upside appears imminent from a technical perspective…Gold Bullion Development (GBB, TSX-V) is unchanged at 58 cents on relatively light CDNX volume of just over 200,000 shares…we’re not expecting news from GBB until after its financing closes…using GBB’s March financing as a guide in terms of timelines, we expect this financing to close the week of October 18…GoldQuest Mining (GQC, TSX-V) is already up 41% since we introduced it to BMR readers last week at 19.5 cents…we are extremely excited about GoldQuest as this is a company, like GBB, with all the right ingredients to be a huge winner as this historic bull run continues in Gold and the CDNXGoldQuest truly has a highly prospective portfolio of advanced stage and grass roots exploration projects in the Dominican Republic where it has been active for nearly a decade…the company also has a zinc-lead-silver deposit in northwest Spain (Lundin Mining is a partner) that has been targeted for production…Micon International is currently performing a 43-101 on the Toral Project (historical estimates are 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag)…it remains open along strike and at depth…GoldQuest has also secured a 2nd polymetallic deposit just a 20-minute drive from Toral…details are forthcoming…in June, 2006, GoldQuest got as high as $1.80 without the projects in Spain and with even less than it has now in the DR…we encourage BMR readers to think “big” on this one as GoldQuest has some great opportunities on several fronts…the company has all of its ducks in a row and has a modest current market cap of only $25 million at 27.5 cents…Richfield Ventures (RVC, TSX-V) has pulled back to $2.75, its 20-day rising moving average which it has essentially remained above since starting its big move in early July…Richfield continues to make excellent progress in developing its Blackwater Gold Project in central British Columbia which has multi-million ounce potential…

October 6, 2010

BMR Morning Market Musings…

Gold hit another record high this morning of $1,352.10…as of 9:45 am Pacific time, the yellow metal is up $7 an ounce to $1,348…Silver is ahead 18 cents to $23.05…the U.S. Dollar continues to drop and is now at 77.38, off a third of a cent…the CDNX continues to charge higher…the Index is up 8 points to 1776…Gold Bullion Development (GBB, TSX-V), not surprisingly, has increased its non-brokered private placement…strong demand has obviously come in for the 54-cent financing which will now be to a maximum of $8 million as opposed to $6 million…the company will have over $10 million in its treasury, a significant war chest to embark on an even larger Phase 3 drill program at Granada…GBB is currently down 2 pennies at 57 cents…Seafield Resources (SFF, TSX-V) has significantly expanded the potential of its Dos Quebradas Property at Quinchia in Colombia with three new major areas of interest…one of those is Santa Sofia where a soil anomaly has a surface expression more than twice the size of the company’s current known deposit at Miraflores…we have always viewed Dos Quebradas as an outstanding target – Seafield’s best at Quinchia – and this morning’s news from Seafield on the geochemical soil survey throughout the Dos Quebradas area confirms that…AngloGold Ashanti, after its limited previous work at Dos Quebradas, outlined the potential for a multi-million ounce deposit at that property…Seafield is now discovering new porphyry targets at Dos Quebradas that Anglo overlooked…drilling is expected to commence soon at Dos Quebradas…6 holes have been completed at Miraflores with assays pending…Seafield is hoping to expand the current 43-101 Miraflores inferred resource from nearly 800,000 to 1 million or more ounces…SFF is currently down a penny at 23.5 cents…GoldQuest Mining (GQC, TSX-V) hit a new 52-week high of 30 cents yesterday…the stock has backed off this morning and is currently down 1.5 cents to 26.5 cents…we are extremely bullish on this company and its prospects in the Dominican Republic and Spain…any pullbacks in GoldQuest over the last couple of weeks have been very minor and short in duration…there is huge potential with GQCSidon International (SD, TSX-V) is beginning to rebound after dropping as low as 9.5 cents Monday…we updated Sidon in an article we posted earlier this morning…we continue to believe strongly in the potential of the company’s Morogoro East Gold Property in Tanzania…Sidon has now completed its $1.3 million financing at 10 cents and also recently raised another $400,000 through the exercise of stock options…Sidon is up 2 cents to 12.5 cents on CDNX volume of 1.5 million shares…

Sidon International Resources Update

As investors, quite often our greatest challenge is overcoming our emotions.  Fear and greed are both very prevalent in the market.  Recently, the “fear factor” has seemingly played a role in Sidon International’s (SD, TSX-V) weakness as the stock dropped nearly 40% from a high of 15 cents September 20 to a low of 9.5 cents 2 days ago (in the midst of a rising and strong overall market).   It bounced back up yesterday to close at 10.5 cents.  We’ve received a lot of emails regarding Sidon recently, so we made it a priority to get in touch with President and CEO Kamal Alawas.  We spoke with him at length late yesterday afternoon.

We first introduced Sidon to BMR readers last spring when the stock was sitting at a nickel and the company reported March 31 that it had entered into a letter of intent to acquire the Morogoro East Gold Property in Tanzania.  This was a fledgling company with an unimpressive past, not unlike some others we have highlighted at BMR that have gone on to become very successful.  We said Morogoro East, a very prospective property in an underexplored area of a country increasingly becoming known for gold exploration and mining, would become a “company changer” for Sidon.  That’s exactly what has been happening.  Sidon got as high as 18 cents in early August when it got a little ahead of itself and we did warn there was resistance in that area.

We view Sidon’s drop to strong support around 10 cents as merely a healthy correction within a primary uptrend for this stock which, based on RSI and Stochastics indicators, has now become oversold technically.

The drop in the share price has come at a time, ironically, when Sidon has strengthened itself financially (the company raised $1.7 million in September, $1.3 million in a private placement at 10 cents and $400,000 through the exersise of stock options) to get the ball rolling with Morogoro East.  Laurence Stephenson, Sidon’s consulting geologist, is overseeing operations at Morogoro which gives us a great deal of confidence.  We first spoke with Stephenson last spring.  He knows Tanzania like the back of his hand and he has a lot of faith in this particular project.

Sidon is currently test mining a placer deposit at Morogoro and making all the necessary preparations for an upcoming drill program at the property.  There were as many as 1500 artesianal miners on the site recently, which tells us something about Morogoro’s potential, but Stephenson has resolved that problem effectively.  Several dozen of these locals are now helping Sidon with work that needs to be done at Morogoro.

Tanzania is a hot bed of exploration activity at the moment so investors need to understand that for competitive reasons Sidon right now is being careful in what it says regarding Morogoro and its overall game plan for that country.

Alawas also told us the company is working on plans for a new web site and more effective communication with investors which is encouraging to hear.

Sidon has come a long way over the last 6 months.  There are always some growth pains in a situation like this – Gold Bullion (GBB, TSX-V), Seafield (SFF, TSX-V) and other companies in the BMR Portfolio have experienced growth pains as well – but investors should not allow themselves to get distracted from the “big picture” and blue sky potential, especially given the type of market we’re in right now and looking forward to over the next number of months.  With that in mind we view the recent drop in Sidon’s share price as an opportunity and a normal development within an ongoing bull phase, not the sign of a problem.

Below, John has an updated chart on Sidon and examines how it looks from a technical perspective:

John: Yesterday, Sidon opened at 10 cents, its low for the day, then closed at 10.5 cents for a gain of 1 penny on total CDNX volume of 772,000 shares. This was only the 2nd trading session in the last 11 that SD saw a gain.  As of 7:45 am this morning, Sidon is unchanged at 10.5 cents on light CDNX volume of just under 100,000 shares.

Looking at the 6-month daily chart we see that on July12 there was a sudden increase in volume which resulted in the start of a 9-session flagpole (black dotted lines) which took the stock from a nickel to a high of 15.5 cents.    Then it formed a 5-session continuation pennant as noted on the chart. This pennant was validated by the declining volume (mauve line).  On August 29 there was another breakout and a 3-session flagpole moved the stock from a low of 10.5 cents to a high of 18 cents.  Note the black candle at the top of that flagpole which signified exhaustion and told us the stock was likely going to correct.

From the beginning of August until today Sidon has been trading in a downsloping channel. Monday’s low of 9.5 cents was at the bottom of the channel, thus the stock bounced off support there.  As shown by the green horizontal lines there is very strong support at current levels.

Looking at the indicators:

The RSI has formed a bullish “W” formation at the 30% level and is pointing up – very bullish.

The Slow Stochastics has the %K (black line) forming a flat “W” formation at the 17% level.  With the %D (red line) pointing down, it could cross up over the %D in the near future – very bullish.  Note that the vertical thin mauve line shows how the stock moved up when the Slow Stochastics %K crossed up over the %D at the beginning of September.

The Chaikin Money Flow (CMF) indicator shows that there was little buying pressure during the most recent 5 sessions with investors just picking up the shares as offered.

Outlook: Sidon appears to have bottomed out and is likely on the verge of a rebound.  The momentum indicators are set for a move – the price is at the bottom of the channel, therefore we can expect the first move to be to the top of the channel where it will encounter resistance (blue line) prior to a possible breakout to new highs.  The long-term moving averages remain in strong bullish alignment, confirming the primary uptrend is fully intact.

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