Technical analyst Clive Maund charts a junior explorer and explains why he sees it as a speculative buy.
Although we are generally aiming to gravitate towards the large and mid-cap gold stocks during the early stages of the sector bull market, it is worth considering smaller stocks from time to time, if they measure up fundamentally and technically. Goldcliff Resource Corp. (GCN:TSX.V) is one such stock, and it has just successfully completed a round of financing.
On its latest 21-month chart we can see that about a week ago it tried and failed to break out of a large Cup & Handle base pattern. This failure was not negative, for several reasons. One is that the attempt occurred on strong volume, which is bullish, especially as this was the culmination of a build up in upside volume for a couple of months prior to it. Another is that the reaction back into the base was on much lighter volume—so it looks like it needs to do a little more work in the base pattern before it makes a sustainable breakout. Several factors support a successful breakout attempt soon. One is the buildup in upside volume already mentioned, another is the strong Accumulation line resulting from this, and still another is moving averages being in bullish alignment because the stock is trending higher.
We can see the breakout attempt and subsequent reaction back in more detail on the 6-month chart.
The long-term 18-year chart is also interesting, not just because it shows that Goldcliff is historically very cheap here, but also because it reveals that the Cup and Handle base that we looked at on the 21-month chart fits within a much larger Cup and Handle base that dates back to 2012–2013, which can be “opened out” using a log chart.
The conclusion is that Goldcliff is a speculative buy here after its reaction back of recent days to support in the vicinity of its rising 50-day moving average. The stock trades in light volumes on the US OTC market where limit orders should always be employed.
Goldcliff Resource Corp. website.
Goldcliff Resource Corp. GCN.V, GCFFF on OTC, closed at C$0.13, $0.095 on 4th October 2019.
Originally posted on CliveMaund.com at 4.15 pm EDT on 6th October 2019.
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
( Companies Mentioned: GCN:TSX.V,