BullMarketRun.ca

After a great deal of due diligence that included a site visit in late August, discussions with geologists and a comprehensive review of publicly available historical information pertaining to the former Montauban Mine in Quebec, BMR was very pleased to add Excel Gold Mining (EGM, TSX-V) to its portfolio yesterday at 16 cents.  We have been watching this company closely over the last number of months since a volume breakout in May/June. Excel has an exceptional property and the right people to succeed in a huge way during this historical bull market run in junior gold and mining stocks that we expect to intensify in the coming months.  Montauban is a former and significant base metal and gold and silver producer with major untapped potential that we believe is about to be unlocked.  It’s exactly the type of company we like to uncover at BMR – overlooked and undervalued with massive upside potential (the average gain in the BMR Portfolio over the last year is nearly 175%).  In the coming days we’ll be reporting more on the fundamentals that we expect will ignite EGM.  In the meantime, as part of your due diligence, we urge to you to examine the very bullish EGM chart below along with John’s comments:

John: On Friday EGM opened at 15.5 cents, its low, and then during the day it climbed and closed at its high of 17 cents for a gain of 1 penny on total CDNX volume of 385,000 shares (75,000 on Alpha).

Looking at the 6-month daily chart we see that starting on June 25, EGM began trading in an upsloping channel which then developed into a horizontal trend channel when the upsloping trend channel trendline was broken as noted on the chart. Trading has continued in the horizontal trend channel between 14.5 cents and 18 cents until Friday. During this time the stock has consolidated and the volume has declined as required for a valid consolidation.

The last 4 trading sessions have shown a slightly higher upside volume with the stock price gradually rising during the week. Note that at the beginning of September there was an attempt at a breakout to the upside (thin blue vertical line) – a price rise with increased volume – but this failed. We don’t expect it to fail this time and a move above 18 cents on high daily volume of greater than 2 million shares would confirm the breakout that we’re anticipating here.

Looking at the indicators:

The RSI has broken above the 50% level and is at 56% pointing up – bullish.

The Slow Stochastics has formed a large “W” formation and the %K (black line) has broken above the %D (red line), low down with both climbing – bullish.

The Chaikin Money Flow (CMF) indicator shows how the buying pressure declined during the consolidation (mauve line) and then how it reversed and increased on Thursday and Friday to break into the green – bullish.

Outlook: EGM’s 2.5-month consolidation appears to be coming to an end. The volume has declined throughout as required and has recently strengthened. There is every indication that will see a serious and imminent attempt at an upside breakout above the 18 cent level.  The chance of that succeeding is very high based on the overall strength of EGM’s chart and the bullish fundamentals that are in play here.