CMC Metals Ltd. running on low volume

May 6th, 2011 – 1 Comment

CMC Metals. Please let me know your thoughts. Thanks! Kal   Hi Kal, Thanks for the assignment. CMC Metals Ltd. ( CMB TSXV) is a junior mining company with some interesting prospects with the Silver Hart property in the Yukon. On December 07, 2010 the company reported bonanza drill results with grading at the top end of […]


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CMC Metals. Please let me know your thoughts.

Thanks!

Kal

 

Hi Kal,

Thanks for the assignment. CMC Metals Ltd. ( CMB TSXV) is a junior mining company with some interesting prospects with the Silver Hart property in the Yukon. On December 07, 2010 the company reported bonanza drill results with grading at the top end of 142.9 ounces of silver per ton. We all love the excitement that comes from that sort of news release but lets consult the charts to see if the stock lives up to its press.

The three year chart indicates that the best time to have gotten on this ride was back in September of 2010 when it broke through resistance at $0.15 and ran like a greyhound to $0.45 by December of 2010. Even with these old eyes of mine I can see the double top that formed in December signalling that the uptrend was about to reverse. And that’s without expanding the size of the chart to the right! In addition the RSI and MACD both moved lower adding increased weight on the side of selling as opposed to buying the stock.

The six month chart provides a better view of the double top  that signalled  a better than 40%  retreat to $0.26 . CMB tested support along the 200 day moving average in mid March and caught a bounce to $0.38 as silver moved aggressively higher. As illustrated the stock met resistance at $0.38 and pulled back to $0.28.

Currently none of the indicators are suggesting a move higher. In addition in the last 30 days the volume of trading was below the three month average for 20 days and three of the last three days. Volume is required to move a stock higher.

If you like the story keep this one on your watch list. Its hard to ignore bonanza grade drill results but without new activity to stoke the ardour of investor interest this one may have to build a base before it can move higher.

MAKE IT A MASSIVE MOTHER’S DAY WEEKEND AND HAPPY CAPITALISM!

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