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John: Adventure Gold (AGE, TSX-V) opened at 46 cents Friday, fell to a low of 43 cents and then climbed and closed at its high of 48 cents for a gain of 2 pennies (4.35%) on CDNX volume of 151,000 shares.

Looking at the 9-month weekly chart, we see that near the end of May AGE started on an uptrend from the 16 cent level and continued up to a high of 56 cents by early December.  From November 1 to now it has traded within a horizontal trend channel in a distribution mode.  This channel has a top boundary denoted by a horizontal blue dotted line and the lower boundary by the horizontal green support at 40 cents.  During this distribution period both the volume and the buying pressure denoted by the Chaikin Money Flow indicator have been fairly consistent. The EMA(20) provides close bullish uptrend support and is pointing up.

The Fibonacci set #1 (blue) has a seed wave with a base at 14 cents and 100% at 37 cents.   The target for this set was at the 52 cent level which corresponds very well with the top of the channel. The Fibonacci set #2 (green) has its 100% level at 52 cents and projects a target at the 75 cent level (this is not a BMR price target as we don’t give price targets but a theoretical Fibonacci level based on technical analysis).

Looking at the indicators:

The RSI at 65% has unwound the overbought condition that existed from September to December and has turned up from support at the 60% level – bullish.

The Chaikin Money Flow (CMF) indicator at 0.132 as stated above has been fairly consistent during the distribution phase and has been bullish now for over 9 months.

The ADX trend indicator has the +DI (green line) at 28, flat and above the -DI at 15 which is also flat. The ADX (black line) trend strength indicator is high at 47. This orientation shows the primary trend is both bullish and very strong.

Outlook: Adventure Gold is looking very strong. We’re waiting for the distribution phase to be completed and the price to then get through the resistance in the low-to-mid-50’s, accompanied by a large increase in volume. This is a very bullish chart which illustrates it’s only a matter of time before AGE makes a powerful move to the upside.

Note:  The writer holds a position in Adventure Gold.