On a regular basis at 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 carefully review fundamental factors as well. “Technically Speaking” is merely meant to introduce possible opportunities, from a technical perspective, that readers may wish to investigate. As always, stock coverage at BMR is for informational purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations.
We became more familiar with Trueclaim as a result of our extensive due diligence on Currie Rose Resources (CUI, TSX-V) which continues to look very strong. About a year ago, in order to focus strictly on its highly prospective Tanzanian properties, Currie Rose optioned its Scadding Gold Property near Sudbury to Trueclaim which has also built up a nice land package around Scadding. Trueclaim has been very detailed and diligent in its exploration work there and a major drill program started last month.
Volume has picked up in Trueclaim the last few days (it’s quiet today because of Remembrance Day) and a reversal in the stock’s 200-day moving average appears to be close at hand. The 100-day reversed to the upside in late September and currently sits at almost 13.5 cents, just a fraction below the 200-day SMA. As of 10 am Pacific time, TRM is trading at 17 cents, down half a penny, giving it a market cap of just over $8 million. John takes a detailed look at the Trueclaim chart below based on yesterday’s closing numbers:
John: This week, Technically Speaking takes a look at Trueclaim Exploration (TSX-V, TRM), a company engaged in the acquisition and development of precious and base metals properties currently within Ontario and Arizona. On October 19 the company announced the commencement of a 2,000 metre drill program on its East Wanapitei Property and an additional 8,000 metre drill program to follow for the Scadding mine site area.
Yesterday, TRM opened at 16.5 cents, its low for day, and closed at its high of 17.5 cents, up a penny on CDNX volume of 220,000 shares. Looking at the 15-month weekly chart we see that during the 2nd week of November, 2009, TRM reached a high of 34 cents. From that time the stock price declined in a 5 wave motive phase to a low of 9 cents at the end of June, 2010. Since then it has climbed in an orderly manner to where, for the past 5 weeks, it has been trading in a horizontal consolidation flag between 15 cents and 17 cents denoted by a blue top line and a green bottom line. The flag consolidation was validated by the decreasing volume over that period (downsloping mauve line).
Yesterday TRM broke above the 17 cent resistance level and closed at 17.5 cents. Although it only broke out by half a penny, the chart shows this is significant. This breakout must be confirmed by a white candle and an increase in volume. The volume has increased over the past 2 weeks. The EMA(20) moving average (blue line) provides close bullish support. The Fibonacci target is 21 cents which coincides with a pivotal resistance as shown on the chart which makes this a strong resistance level. The next pivotal resistance is at 26 cents.
Looking at the Indicators: The RSI has been flat at 60% for several weeks and this week it has turned up – very bullish.
The Chaikin Money Flow (CMF) indicator shows that the average buying pressure has continually increased for the last 9 weeks and now it is at the 0.45 level which is very bullish.
The ADX trend indicator has the +DI at 27 and above the -DI at 12. The ADX (black line) trend strength indicator is at 23 and climbing – a very bullish orientation.
Outlook: Trueclaim is showing techncial strength and momentum will increase on a move through 17.5 cents on strong volume. The chart pattern and indicators are very bullish for potential near-term price appreciation.
