Gecko Research, Apr 18, 2015
The following was part of our ‘Weekly Update’ newsletter that we sent to subscribers today.
On April 10th we posted a short piece containing some technical analysis on GCU (Is Gold Canyon getting ready for a breakout?). Although technical analysis is useful to us, it’s not 100% reliable. This time it was though and we have just seen GCU breaking out on good volume. The stock gained 11% on Friday alone with more than 700,000 shares traded. Readers who bought on our Feb 25th investment idea are now enjoying a 47% gain.
1) M&A activity is strong and if we see other juniors taken out, that will increase the interest for GCU even more
2) Rumors of a possible take-over are still intense (consider that Gold Canyon’s Springpole deposit is one of the largest undeveloped gold resources in Canada in the hands of a junior)
3) We find the stock greatly undervalued
4) GCU can be thinly traded from time to time and to get back in could turn out to be a difficult task
5) The chart looks like a dream from a technical perspective
The chart above is self-explanatory but we’ll say a few words for those that are not so familiar looking at charts. A (positive) Golden Cross is when a shorter term moving average (MA50) is crossing the longer term moving average (MA200) to the upside. As you can see in the chart above, that is about to happen soon and is considered to be a very bullish sign as it confirms a new trend. There is a saying, “Let the trend be your friend”, and we feel this is very true for Gold Canyon. We can see that the stock has created an almost perfect V-shaped bottom and with a new up-trend being confirmed soon, we are holding on to our shares.
Even if “Golden crosses” aren’t 100% predictable to determine future price moves, it’s loved by many and seen as very bullish. The same is true for the “negative” golden cross as we point out in red which happened around Oct 1st, 2014.
(Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Instead, technical analysis can help investors anticipate what is “likely” to happen to prices over time.)
Previous articles on Gold Canyon:
* Gold Canyon – Just How Cheap Is It?
(http://blog.geckoresearch.com/content/8364, Apr 7, 2015)
* Gold Canyon is Heating up – Institutional Buying is Evident
(http://blog.geckoresearch.com/content/7964, March 6, 2015)
* Ripe for a Take-over – Gold Canyon Resources
(http://blog.geckoresearch.com/content/7814, February 26, 2015)
Team Gecko Research
If you like our work, feel free to share this link with your friends for our free newsletter: www.geckoresearch.com/signup
We are not investment advisors and what we write is our own view only. Please read our disclaimer