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Advance Gold (AAX.V) - Sirios Resources (SOI.V)
Walker River Resources (WRR.V)
Fundamentals of a company, regardless of the industry, is crucial in picking good stocks. Charts can help one refine their timing. Together, when used well, they can be the combination that helps one get in stocks on the cheap and sell them when it is time. Importantly, they can also help investors avoid disastrous loses.
News on drilling is the most important fundamental for exploration juniors, and it is what I usually report on. I also believe when you look at the charts in the context of the drilling and drill results, you become a much better analyst of charts. Today, I wanted to bring them together.
Charting The Course Of Stocks
Before we start looking at stocks, I think it is important to point out that when I look at charts, I like to use basic charts and few indicators. Just like I like to focus on drilling because it is the most important fundamental of a junior, I also like to find the key drivers of the stock.
For me, putting the stock chart into the context of the news, then looking at the trends makes it much easier to see the potential for what is coming ahead.
Galway Metals (GWM.V)
Galway is a new pick from the March 3/2019 report. I had been watching them since they broke out in January, due to their gold discovery in New Brunswick. The news came out and it took off right away. I hate chasing, so decided to be a spectator.
Of course everybody would love to have bought it when it was a patchy trader near the bottom. That takes homework and understanding the project being drilled. Problem is, it isn’t easy to find juniors prior to discovery.
This isn’t the first time that I’ve picked a stock after it had peaked and then pulled back. With those kind of exploration stocks, I’m looking for a couple specific things, grade and continuity. The grade is usually what makes for the early excitement, but, the continuity tells you whether or not it can get bigger and become a mine or takeover.
Even though I missed the initial excitement, and then the stock peaked and rolled over, I’m more comfortable picking them recently because I have more confidence that they are answering the right questions on the continuity potential.
You can see in the chart the 50-day and 200-day moving averages, which give me a feel for the longer term and short term trends. On the 200-day, the red line, you can see a shallow trend, that means the stock has been a flatlining stock for a long time.
Not long after the discovery, you will see the 50-day busted through the 200-day average. This is called a golden cross and is a very bullish indicator. Just recently, you can see the stock is trading right at the 50-day line, which makes for a nice setup on the chart.
The next thing to look for are catalysts that can give us an indication of where the stock is going next. The first clue, is the power of the move it made on volume and price. It suggests the next move should be bullish. But, let’s have a look at the news for more clues about market moving catalysts.
The last news release announcing drill results, they also mentioned they have pending results. Also, that some of those are from where they got all the excitement back in January.
The stock looks like it is bottoming after the peak, and with pending assays, it looks like they have a good chance for a breakout.
Great Bear Resources (GBR.V)
Great Bear is a perfect example of why you don’t need to worry about when you get on the bus, if they have something special, there are plenty of chances.
Below are two charts, a weekly chart that goes back to 2017 and a daily chart that goes back 6 months.
In the weekly chart at the top, you can see during the first half of 2017, they averaged around 25 cents. Then in the summer they perked up and for the first half of 2018 averaged around 50 cents. This action was based on some drilling success. Then in summer 2018 it blasted off due to the high-grade gold discovery at their Hinge Zone. They have been an incredible performer since that discovery and have set the stage for the potential of a multiple million ounce gold discovery in Red Lake, Ontario.
In the daily chart below you can see the weakness at year-end 2018, then it has resumed the move up. I picked it in the report a couple times during that period. If you know the projects and stocks you pick well, it makes it much easier to make those picks on the dips.
I think Great Bear has a special high-grade gold discovery that is showing the early drill results that suggest it could be like the big mines in Red Lake. If it is, the current valuation will prove to be a bargain.
Azimut Exploration (AZM.V)
I’ve followed Azimut for a few years, they are a Quebec based explorer with a good group of projects. On January 25/2019, they announced an expanded agreement with an important Quebec institution.
This woke the stock up and it has been doing well since. I didn’t make them a pick that day, but, I started covering them again and added them to my radar screen. The next big catalyst will be drilling.
I wanted to include this chart as an example of being on the lookout for developments of significance. This action wasn’t based on drill results, it was about a smart institution deciding to ramp things up on the exploration front.
If I was going purely off stock action, it looks they have a lot more blue sky ahead. They passed a golden cross recently and they are getting closer to their drilling season.
Walker River Resources (WRR.V)
I picked Walker River Resources on January 30/2019, based on impressive drilling results from their Lapon Canyon project in Nevada. Not long after picking it, I bought stock at 11 cents. In the past couple weeks, they also became a member of my website sponsorship program. It is safe to say, I like this one a lot.
They actually softened a bit after announcing the news on January 30/2019 that caught my attention and made me want to pick them. In early February I bought my stock at around 11 cents, and haven’t sold any since, even though I had a good double to sell into.
I didn’t sell and have held since because I’m a big fan of high-grade gold, and gold discoveries in Nevada. Mainly because when companies make important discoveries there, they get the Nevada Premium in their valuations. I picked them, bought their stock and invited them to join my sponsorship program because I think they have very good potential to get a Nevada Premium valuation.
As is always the case, the next thing is to look for catalysts. They are preparing for their next round of drilling. My guess is that they will start sometime in April.
They have learned a lot from their recent drilling and attracted a whole new audience. The next act in the play is more drilling which is right around the corner. It is nice to see it firming up as they get closer to drilling.
Amex Exploration (AMX.V)
Amex Exploration is another pick that has made an impressive new discovery of high-grade gold. I didn’t make them a pick after their first holes that took the stock from the 20 cent level up to the 50 cent range.
When they announced more results at that 50 cent range, I made them a pick and since then have picked them a couple more times and did an interview with them in early March from the PDAC.
Since making them a pick, they peaked at around $1.50 and then rolled over. They have more pending news from drilling and will have a strong news flow for the remainder of the year. Keep a close eye on this one, I think they will appreciate from drilling news and a stronger trend for gold.
Summary Of The Chart Action
There are a couple common denominators that I wanted to point out. In all of the charts above, you will see they all went through a very bullish golden cross.
In the case of Galway (GWM.V), Great Bear (GBR.V), Walker River (WRR.V) and Amex (AMX.V), the golden crosses were all related to drill results. Since their golden crosses, they all peaked at much higher prices, have since topped and rolled over. All of them are also trading right at their 50-day moving averages.
With Azimut, their passing through the golden cross was related to change in the fundamentals, with the increased financial commitment of an important institution. I would say they have some catching up to do with the others and haven’t reached a short term peak.
The action in Galway, Great Bear, Walker River and Amex are all good indicators that the recent action, the pull backs to 50-day moving averages is more of an industry sentiment than based on each company. This kind of action tells me the market is awaiting clarity in the price of gold.
When I see that kind of action in a bunch of gold stocks, I always look to the gold chart to see if there are winds of change coming.
In the gold chart, you can see a bullish cup that has formed over the past year. The bottom was in the fall of 2018, then a bullish run that peaked in late February, then rolled over. Does all this sound familiar, it is the same trend as the stock charts above.
Gold and gold stocks are at an inflection point. I believe the next significant trend for gold is significantly higher in 2019. The gold stocks I highlighted above are well position based on their discoveries, pending news and upcoming drilling to perform well irrespective of the action in gold. Some bullish gold action will add fuel to their fires.
In the News
When it comes to charts, I’m always looking in the context of how does their drilling related news affect the stock chart. The catalysts are almost always drilling related. The group in this section have made recent news that I wanted to point out.
Advance Gold Corp. (AAX.V)
Allan Barry Laboucan is President/CEO of Advance Gold
Advance had two recent news release, one a couple weeks ago that our third phase of drilling is underway. Last week, the company announced that the new permits for the joint venture ground in Kenya with Acacia Mining have been received.
Drilling is always an exciting time for a junior like Advance, we have a cluster of epithermal veins, in an important mining district of Mexico. The model of epithermal veins are well understood in the region as there has been ongoing mining in the area since the 1500s. Now we are at the exciting part of drilling deep to test for the boiling zone of the system.
Sirios Resources (SOI.V)
Member of the Allan Barry Reports Website Sponsorship Program
Sirios announced last week that they have completed their winter drilling program at the Cheechoo gold project in Quebec. They mentioned that they increased the drilling on their new high-grade discovery area. Several of those holes, plus, holes from other parts of the property are pending.
Also pending is their resource estimate from the main zone where they have done extensive drilling.
Premier Gold (PG.T)
Premier Gold has been a long term pick in the reports. They are always putting out news as they have their hands in so many good projects. The projects range from exploration to mining operations.
I follow them closely because I think that there is a big need in mining for more middle tier sized gold miners. I only follow a few because there just aren’t a lot to follow, especially of the quality of a Premier Gold. I could have put Premier in the chart or news section. Their chart looks significantly oversold, yet, they have been putting out a lot of good news of late. Watch for a bounce on news.
I’m still banging away at adding some important new features to the website. One of them I’m most excited about is having a forum feature, where I and others can post comments on the sector.
It will be a place where I can do smaller reports, when things pop up. I will also use it like a question and answer venue to discuss my commentary and picks.
Check out the companies above and feel free to share it among your friends that follow the gold exploration sector.
All the best,
Allan Barry Laboucan
Allan Barry Reports
Advance Gold (AAX.V)
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.