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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