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.
