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Gold Bullion Development (GBB, TSX-V) reported last Tuesday that it expects to release an exploration update and additional assay results from the LONG Bars Zone the week of September 6, so next week promises to be an exciting one for this stock.  In fact, the entire rest of the year for Gold Bullion is going to be extremely interesting as more drilling takes place and many more results flow in.  We absolutely love the fundamentals here.  And for the technical side of the equation we turn to John for his updated analysis of the GBB chart:

Last week Gold Bullion opened at 54 cents, traded as low as 52 cents, and then methodically climbed to 70 cents, just one penny shy of its all-time high.  It closed Friday at 67 cents, up 12 cents or 22% for the week on total CDNX volume of 8.5 million shares.  Throughout the week investors were patient, gradually moving the stock up and easily absorbing all that was offered.

Looking at the 8-month weekly chart we see that trading last week broke through the symmetrical triangle (thin blue converging lines) and almost reached the all-time high, a resistance level, at 71 cents (horizontal blue dotted line).  This was a critical move for it showed how positive the investor reaction has been to the company’s news release of August 31, stating they had finalized property agreements and also expected to release further assay results during the week of September 6.

Since the last week of June the trading pattern formed is a “cup” (mauve lines) without a “handle” at the moment.   If the news release does come out next week I doubt if a handle will form because if the news is positive, as we expect, any shares that become available below 71 cents could be quickly gobbled up (any “sell on news” could be short-lived).  This cup looks very good in that it’s not too deep and it’s “u-shaped”.

Looking at the indicators:

The RSI is right at the door of the overbought region at 70%, exactly at the same level just prior to the last breakout during the final week of February (blue vertical line, left hand side).  The previous overbought condition has completely unwound, thus there is plenty of room for a big move to the upside – very bullish.

The Slow Stochastics has formed a “W” formation just above the 50% level – very bullish.

The Chaikin Money Flow (CMF) indicator shows the buying pressure,  although higher than the previous 4 weeks, was not high.  This is a very bullish sign for it shows how little buying pressure was needed to push the stock up 22%.

Outlook: A very interesting scenario is shaping up with Gold Bullion over both the immediate and longer term.  GBB’s chart has many bullish components to it.    The news last week set the stage for investors to position themselves for a possible big break to the upside on the release of anticipated good results.  There are “deep pockets” waiting to take this stock considerably higher in a short period of time if the fundamentals are right.