East Asia Minerals Corporation in a brutal decline

Sep 14th, 2011 – Comment

The RSI indicates that EAS has been oversold since mid July which is a sign of weakness.


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Lou,

Could we get your assessment of EAST ASIA MINERALS (EAS)

 Thanks

Robbie

Hi Robbie,

East Asia Minerals Corporation ( EAS TSXV) is in the process of spinning off assets to existing shareholders and focusing their efforts on the Miwah gold project in Indonesia. As they transition from the exploration phase towards feasibility they have made changes in the executive suite. President, CEO, and director Michael Hawkins resigned July 26, 2011.

The stock has been in a sharp decline since May of this year. Some but not all of the retreat can be attributed to the efforts to distribute assets to shareholders. A review of the charts will help to explain the prospects for the shares

 

 

The three year chart tells the tale of an aggressive retreat from the highs of $8.55 on December 31, 2010.  From there it pulled back to $5.50 in March, 2011 when it announced the distribution of assets.  Worth noting is that a death cross surfaced in March as well. The shares held on to $5.50 until late April of 2o11 but after that it fell into a water fall sell off.

 

 

 

 

The six month chart illustrates the sell signal generated by the MACD in late April as the stock was trading at $5.00. From there it was all down hill. The MACD generated another sell signal in mid July when there was still an opportunity to get off the ride at $3.00. The RSI indicates that EAS has been oversold since mid July which is a sign of weakness.

EAS is a prime example of taking profits when they are available. The selling that has take the shares from $8.55 to $5.50 to $3.00 and now to $0.78 is a ride no one should ever take twice. Also keep in mind that the company is a junior mining company that has yet to generate revenue or a gram of gold.

If you are thinking of bottom fishing this one be cautious! These are dangerous waters!

 

Make it a profitable day and happy capitalism!

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