Drilling by Gold Bullion (GBB, TSX-V) on Adventure Gold (AGE, TSX-V) property at Granada, AGE’s ongoing drill program at its promising Pascalis-Colombiere Property near Val d’Or, and continued deep drilling by Lake Shore Gold (LSG, TSX) at the Meunier-144 joint venture at Timmins West are just three reasons we see immediate potential for Adventure Gold which has a solid portfolio of properties and a terrific opportunity to enjoy a breakthrough year in 2011. During my recent trip to Rouyn-Noranda I met with Jules Riopel (VP Exploration & Acquisitions), a seasoned and respected geologist who has a clear game plan and a high degree of confidence that AGE’s project strategy will succeed. The company is in good financial shape and the odds of at least one of its properties “hitting the jackpot” has to be considered excellent. We encourage readers to do their own due diligence on Adventure Gold. We believe you’ll see a major opportunity here with a company very focused on the discovery potential of its properties. Below, John examines the AGE chart and sees solid support levels and increasing buying pressure recently:
On Friday, Adventure Gold opened at 40 cents, its low, then climbed and closed at its high for the day of 42 cents – a gain of 2 pennies on relatively light CDNX volume of 55,000 shares.
Looking at the 6-month daily chart we see that since the first week of December, AGE has consolidated in a downsloping coil between a high of 56 cents and a low of 36 cents. During that time the volume has fallen substantially, thus validating the consolidation.
There are 2 levels of solid support (green horizontal lines) – 35 cents and 40 cents. Two main resistance levels (horizontal blue lines), 44 cents and 50 cents, are also shown. The close supporting moving average for an extended uptrend is the EMA (20). This is presently at 45 cents and has flattened out from its previous downward move, a bullish sign that perhaps a bottom has been reached. If and when the price breaks above this moving average it’ll be a very bullish sign, especially if accompanied by a large increase in volume. Watch for it.
The Fibonacci set shows the 100% level at 44 cents, coinciding with a resistance level. The next Fibonacci target is shown at 63 cents (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 is low at 41% and may be forming a base “W” formation – very bullish. Similarly, the Slow Stochastics has the %K (black line) at 29, pointing up and above the %D (red line) at 22. This may continue to go up or form a “W” formation. Either way it looks very bullish.
The Chaikin Money Flow (CMF) indicator shows the buying pressure is starting to pick up in the last 4 sessions, another bullish sign.
Outlook: On Friday, AGE bounced up off solid support at 40 cents and with the basing patterns of the indicators and higher volume (continued increased buying pressure) we could see a significant move.
Note: Both writers (Jon and John) each hold a position in AGE.
