Technical analyst Clive Maund charts a relatively unknown gold stock that he believes is positioned to break out.
Casa Minerals Inc. (CASA:TSX.V) is a relatively unknown gold stock that is likely to get more known and more appreciated as the sector comes back into favor again after years in the wilderness.
Yesterday, the company’s stock gapped higher on very strong record volume on news of a gold discovery at one of its properties. We can see this move on the latest 1-year chart for the stock which shows how it has been stuck in a rectangular consolidation pattern from the start of this year. We can also see how yesterday’s sharp gain failed to break the price out of the top of the pattern, since it closed at the resistance at the top of it.
However, what is most important to observe is the large gap combined with very heavy record volume accompanying the move this is very bullish and indicates a high probability that the stock will soon proceed to break above the resistance at the top of the Rectangle to enter a new bull market, and in this it should be assisted by the sector as a whole advancing, which it is now in position to do. Note that we could see a minor reaction back from the resistance first before it breaks out, which would not be a problem.
Casa Minerals is therefore rated an immediate speculative buy, and especially on any minor reaction. The company has a reasonable 36.4 million shares in issue. Note that this stock is only traded on the Toronto Venture exchange.
Casa Minerals website.
Casa Minerals Inc, CASA.V, closed at C$0.215 on 16th October 2018.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.[NLINSERT]
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.