Gold Bullion Development (GBB, TSX-V) finished the week on a powerful note and appears ready to blast through resistance next week at 31 cents as our contributing technical analyst explains below.
From a fundamental perspective, several factors have come together to create what indeed could be the “Perfect Storm” for Gold Bullion:
1. The company has announced the closing of its $4 million private placement and TSX Exchange approval has been received also, effectively “lifting the reigns” off the stock;
2. New Granada drill results and a preliminary resource block model are expected in the near future – speculation is likely to build regarding just how big this bulk tonnage target already is;
3. Gold Bullion is armed with the fattest bank account it has ever had, allowing it to launch a massive new Granada drill program which is slated to begin very soon. In our view all this company needs to prove up a multi-million ounce gold deposit is drill, drill, drill – and that’s exactly what they are about to do;
4. Gold is surging and so too is the CDNX. Gold Bullion is clearly in the “favored space” of companies that are delivering superior exploration results.
Discovery of a multi-million ounce gold deposit – if that is what is proven to be in the ground at Granada – would make GBB’s current 28 cent share price the deal of a lifetime. The fact Gold Bullion’s private placement was so heavily oversubscribed demonstrates what the “power boys” are thinking here.
We’ve visited the Granada Property, we’ve walked the LONG Bars Zone and we’ve researched this story like no one else. We know the potential of this and it is ENORMOUS. Factor in the possibility of record gold prices and who knows where this could go. This is not hype. This is reality. We were screaming from the rooftop when Gold Bullion was sitting at 7 cents in December. We’re back on the rooftop screaming again – GRANADA IS FOR REAL. Osisko (TSX-V) and others are watching closely.
At BMR we’re blessed with an excellent technical analyst, and we say that even though he’s from Ontario (sorry, that’s just a bad Western Canadian joke!). Tonight, Peterborough John was gracious enough to interrupt his activities for an urgent chart analysis on Gold Bullion:
John: The outlook for GBB is very bullish. With volume exceeding two million shares Monday, we could see a good increase in price. The higher volume is critical. The horizontal blue lines on the left hand side of the chart are the Fibonacci levels which show the next target level is 42 cents.
Gold Bullion’s daily chart shows that on Thursday a “hammer” candle was formed, bringing to an end the four-day decline when the day’s trading bottomed out at strong support at 22.5 cents and bounced back to close at 25.5 cents.
On Friday, trading formed a white bullish candle. Combined with Thursday’s “hammer”, this has created a very bullish “engulfing” pattern. This is highlighted by the blue circle on the chart.
The top indicator, RSI(7), shows an orange straight line which is a trendline. Friday’s trading has caused the RSI to turn up and with the expected bullish trading on Monday, it should cross up through the trendline.
The 50-day SMA (blue line) on the chart is increasing as support.
The bottom indicator is the trend indicator, ADX. The black ADX line shows the strength of the trend, not the direction.
The +DI (green line) is above the -DI (red line), therefore the strength of the trend as shown by the ADX line is bullish. During the consolidation the strength of the bullish trend weakened as shown by the downsloping ADX line. However, this is about to change direction and thus the strength of the bullish trend will increase.
