Technical analyst Clive Maund charts a young gold
explorer that he expects to soar.
American
Pacific Mining Corp. (USGD:CSE; USGDF:OTC) looks set to soar on the back
of a rising gold price, after negative sector sentiment has hammered it down
to a silly price.
It's always nice to pick up a stock that experts are raving about when, by
waiting a few months, you can buy it at a little over a quarter of the price
it was at earlier when they started talking about it, and such is the case with
this one.
You can read about the fundamental story in Why Five Industry Experts Have This Gold Explorer on Their
Radar Screens. Technically, the outlook for the stock could scarcely look
better, as we will now proceed to see.
Our 8-month chart for the U.S. traded stock shows it from when it started
trading back in April. After moving sideways for a few weeks from inception
it went into a stubborn and rather severe downtrend that was aggravated by
the worsening and terminally negative sentiment towards the sector that
persisted until very recently, and only really started to improve last week.
Notice, however, how upside volume has started to kick in over the past month
and especially in recent days, that has driven both its volume indicators
shown steeply higher. This is a very bullish development that usually
precedes a change of trend, and there is certainly plenty of scope for this
stock to recover after its severe decline of the past five months, and given
that it is a prime takeover candidate as made plain in the article linked
above, there is potential for the appreciation of the price of this stock to
be very rapid indeed, as when a big buyer shows up.
All this means that there are three big reasons to buy this stock. One is
that it is cheap, having lost almost three-quarters of its value from
inception, two is that it has a highly prospective property in one of the
richest gold mining areas in the world, three is that the sector is about to
take off higher after a prolonged period of severe depression, and it is a
classic takeover candidate. Wait a minute, that's four big reasons. American
Pacific Mining is accordingly rated an immediate strong buy here. It trades
in reasonable volumes on the OTC market and there are a relatively modest
32.5 million shares in issue.
American Pacific Mining website.
American Pacific Mining Corp, USGDF on OTC, USGD.CSX, closed at $0.08,
C$0.105 on 12th October 18.
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