Commodities and stocks went into retreat yesterday after the Federal Reserve curbed expectations of more monetary stimulus (a good excuse, more than anything, for investors to take money off the table) and weakness continues this morning…Gold has fallen another $23 an ounce to $1,623…it has found support on a closing basis in the low $1,640’s recently, so we’ll see if that trend continues and Gold reverses intra-day….if not, what we’re likely looking at is a test of the $1,600 area which still keeps the bullish inverted head and shoulders pattern intact…the same applies with Silver which is off 86 cents to $31.82…Copper has slid 8 cents to $3.83…Crude Oil is down $1.14 to $102.87 while the U.S. Dollar Index has gained nearly half a point to 79.83…
When the crowd is running in one direction, it’s often wise to go the opposite way…pessimism in the junior resource market right now is quite high and we think that’s a bullish contrarian sign…the mood was similar last December and late last summer/early fall…selling into a market like this out of fear is a losing strategy…now, more than ever, is the time to be searching for opportunities in our view – and there are many of them out there…this market could turnaround very quickly…
The TSX Venture Exchange found support at 1537 yesterday, as shown in John’s chart below, and then closed at 1546, a loss of 24 points…if support doesn’t hold at 1537 today, then a test of 1500 would seem logical…the chart shows a recent increase in buying pressure, so some bargain hunters have definitely been stepping up to the plate…
Argex Mining (RGX, TSX-V)
There continue to be bright spots in the market and Argex Mining (RGX, TSX-V) has certainly been one of those…Argex announced a “technical collaboration agreement” yesterday with PPG, the world’s leading coatings and specialty products company, in order to allow the companies to develop a titanium dioxide product that will meet conventional standards for exterior and interior paint applications…PPG will be able to secure an enhanced supply of titanium dioxide from Argex which closed yesterday at 88 cents on very heavy volume (over 5 million shares) after climbing as high as $1…as positive as the outlook may be for Argex, investors should keep in mind that “chasing” this stock in overbought technical conditions at the moment carries some risk…below is an updated RGX chart from John…
Note: John, Jon and Terry do not hold positions in RGX.
Mart Resources (MMT, TSX-V)
For oil and gas enthusiasts, a company that has been doing exceedingly well is Mart Resources (MMT, TSX-V) which bucked the overall trend yesterday and broke out of a 2-month pennant…as always, perform your own due diligence but this is definitely an interesting chart…
Note: John, Jon and Terry do not hold positions in MMT.
The uptrend in the Venture since Oct last year has been easily broken today. 1500 may act as support tho Id be inclined to think that 1400-1450 bis on the cards.
RSI getting nicely into oversold territory. I think we just need a final puke, as people bail out at any price….stink bids at the ready!
Comment by Mark — April 4, 2012 @ 6:11 am
Agreed. I see 1400 on the CDNX as the final capitualation considering there will be no QE3 release anytime soon and investors are going to want to “sell in May and go away”.
June – July should be a good month to pick up some cheap gold stocks as usual.
Again, the CDNX has not outperformed any of the large indicies since Feb. This was the first signal that things were only going to get worse. Cashy and cautious has been the way, but I would start nibbling at these levels with a target of 1400 on CDNX. Look for the exceptional gold stocks like CAN, VTR, KAM, ATC, WS, LVN to lead us out of this rut. Right now, CAN is trading below its book value. Time to start accumulation of these stocks. The speculative stocks will follow their lead.
Comment by Andrew M — April 4, 2012 @ 6:27 am
Was just taking a look at CAN too. Nice pile of cash so no need to come begging if the market gets tough.
What are you expecting from the Magambazi resource estimate Andrew?
Comment by Mark — April 4, 2012 @ 6:38 am
Here’s Dennis Da Silva’s expectations on resource estimate…he was calling it a buy at 1.11. It has low CAPEX, open pit potential.
BUY 1.11
Dennis Da Silva (manages the Middlefied Resource Fund) comments:
Gold explorer/developer in Tanzania. One of the best performers in 2010 but a poor performer this year. A lot of this has to do with the risk trade coming off, especially for explorers. Very good asset. Key catalyst is probably coming in the 1st quarter of 2012 when there is a resource update when he expects they will be in the 2-3 million ounce range. In the 2nd quarter he is looking for a prefeasibility study
Comment by Andrew M — April 4, 2012 @ 9:09 am
todays smile. A group of pessimists gathered together in hopes of forming a pessimist club they never went ahead on it because nobody thought it would work.
Comment by gil — April 4, 2012 @ 10:37 am
GBB closed at 14 cents with low 12 cents. Tomorrow’s forecast will still be 20% high low range and may close the same. As I said, private placement investors are waiting for the higher price to sell but I do not think it will go below 12 cents unless some flat news are coming out. We have to wait for another 40 days before the next result and the share price will flow between 12 – 14 cents range. You may be a day jump but if there is no volume, the price will fall for sure.
Comment by Theodore — April 4, 2012 @ 2:03 pm
GBB has their AGM on April 12th…I understand that there will be major announcements regarding a Royalty program shortly as wwll. Additionally if you check out their website it suggests that the many languages coupled with the European Marketing firm that they have hired are an indication that they are getting both European and Asian investors. I think it would be foolish to think that there will be no positive activity between now and the 2nd 43-101 in July. Between RE, agm , marketing programs and the Royalty Program I anticipate much activity and a much higher share price in anticipation of the 2nd 43-101!!!
Comment by Natalie — April 4, 2012 @ 2:20 pm
Funny Theodore
you used to come on here everyday posting your 6th sensestuff, then you disappear and now you show back up and the only company you mention since you have been back is GBB, and your 6th sense or whatever it is is always negative. I find that sort of odd. There are a whole lot of companies out there you could be talking about, but GBB is the only one you mention…
I am very surprised today to see how GBB abd RBW have held up, seems the larger companies are the ones that are getting beaten up, maybe Jon and John are right about the CDNX?
Comment by GREG — April 4, 2012 @ 2:50 pm
My six sense stock had died … BER and I only interested in a couple of ones which I bought in the past. GBB was one of the stocks I bought at six cents…. and I sold all of them at 70 cents, 50 cents and cents. The turnover in the past had not come back and I do not believe that the price will find a ground if there is no volume. My sixth sense was positive before about BER but it turned out to be a disaster at 24 sense. Plunged at 4 cents even though I sold all of them at 8 cents. For GBB, I just want to remind investors if you are think positive, try to buy at low say, 11 – 12 cents. Sell them at high and scoop back again after 30% adjustment. NAR is the other share I am holding a portfolio and same for TYP. SFF, I like this one and it be time to buy if it goes back to 15 cents.
Comment by Theodore — April 4, 2012 @ 5:03 pm