Zenyatta Ventures Ltd. a speculative buy

Nov 25th, 2013 – 1 Comment

The company has $9 million in cash and is fully funded through 2014.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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ZEN LOGO

Lou:

Great column and your advice is always useful. I would really appreciate your opinion on Zenyatta Ventures.

Thanks,

Gavin

 

Hey Gavin,

 

Thanks for your kind words and the assignment. I was first introduced to Zenyatta Ventures Ltd. (ZEN TSXV) when George Tsiolis Host of  the iChannel TV program ” The Next Big Winner” asked me to appear as a guest. It just so happened that Donald Bubar, who is a member of the company’s advisory board, was also a guest that week.  The time I spent in the green room and on set provided me with everything I ever wanted to know about graphite’s industrial uses and the purity of the company’s deposit located northeast of Geraldton, Ontario.

A review of the charts will inform my opinion on ZEN.

 

ZEN

The three-year chart indicates that the stock generated great gains for investors who picked it up as it started its advance in August of 2012 when it was trading near $0.15. There was a golden cross that surfaced in early October of 2012 when the shares were trading near $0.50, signalling that there was more to come and boy did it come reaching a 52-week high of $5.00 within a year.

The RSI and the MACD both signalled a sell as the stock peaked and began a retreat that retested support at $2.00 when the momentum indicators then signalled a buy. The shares caught a bounce off of $2.00 and moved higher until it met resistance near $3.50.

 

 

 

 

 

ZEN2

The six-month chart illustrates the overbought condition that prevailed from June of 2013 through late July and the subsequent decline that followed as the RSI and MACD turned lower. There is also the close up of the buy signal generated by the momentum indicators in October. At this point in time it appears that the the shares are retesting support at $3.00.

From the research conducted on your behalf you need to understand the risk associated with ZEN. They have a deposit which is providing great samples but they don’t have a mine yet. The company has $9 million in cash and is fully funded through 2014. If you like the story start to accumulate within the speculative portion of your portfolio.

 

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