From Rouyn-Noranda:
As we continue our visit and examine the fundamental factors that are influencing Gold Bullion Development (GBB, TSX-V), it’s also important to keep an eye on the “technical” state of affairs with the stock and discern what’s happening there. The overall markets dropped sharply yesterday but GBB managed to buck the trend. John provides an updated analysis below:
The Gold Bullion Development chart continues to look very bullish.
John: The strength of Gold Bullion Development is defying the general weakness of the markets. The stock continues to consolidate while waiting for exploration news.
Looking at the daily chart, we see that an ascending triangle (blue lines) has formed. This is a very bullish consolidation pattern. With good news GBB should have no trouble breaking out to new highs.
The 50SMA is providing strong support and is pointing upwards, confirming a bullish trend.
Looking at the indicators:
The average volume is declining but this is normal for all consolidation patterns. The absolute value is still high with 715,000 shares traded Friday.
The RSI is bullish, oscillating between 50% and 70%.
The ADX trend indicator is in bullish orientation with the ADX trend strength (black line) high at 31, above the +DI (green line) which is above the -DI (red line).
The Chaikin Money Flow (CMF) indicator is in the very bullish range (i.e., above the zero line at a value of .28). Even though the stock is consolidating, the CMF shows that buying pressure is increasing – very bullish.
Outlook: Gold Bullion Development is displaying strength in a down market. With good exploration news and drill results the sky is the limit.
