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GDN 1.7¢

a gdn opportunity?

  1. thegupper

    749 Posts.

    The share price of small spec. gold explorer Golden State Resources is approaching critical breakout point. TA by Catherine Davey on Investorweb has the stock qualifying for "big mover" status at a close above .052 cents. GDN is currently trading at .044 with average daily volume having inched upwards in recent weeks as the stock has risen from around .03 cents.

    "Big Mover" status is allocated to those small cap stocks that have a history of sudden rapid upward movement, often in multiples of their starting price. GDN was 52 cents once - i.e. ten times the projected breakout price. It has trawled the lows around .02 - 3 cents for three years with a since but has recently enjoyed an increase in trading volume and a slow but steady rise in price. First point of resistance upon breakout is .088 cents but its history suggests it could go much higher.

    Any chartists like to have a look and offer an opinion?

    To buy in now of course poses a higher risk than getting in upon confirmed breakout. Then again, the rewards are that much greater. I jumped in a while back around .025 cents and I'm happy to hold as it starts to get some wind under its wings.

    Fundamentalists will be interested to read the company's recent announcements on drill results at Leonora. Drilling has been somewhat constrained due to cash constraints but they have had some very promising results nonetheless and in late August I posted excerpts from the company's announcement regarding Leonora assay results. At that time GDN announced it was in "advanced discussions with prospective venture partners" to hasten development of the exciting finds and was looking forward to the results of further drilling on some particularly tantalizing prospects. Two weeks on perhaps we are about to see those discussions / drill projects come to fruition.

    Now maybe someone closer to proceedings knows something or perhaps it's just punters prepared to bet that an announcement on either score will send the stock soaring. I'd have to concede that it's more of an educated guess on their part than an outright gamble if true.

    I consider the downside risk to be low if a medium term view is taken. The company has great tenements, the gold price continues to leap and strain at the leash (despite the best attempts by vested interests to muzzle it) and there is the tantalizing prospect of GDN announcing joint ventures to bring mines into production phase speedily.

    Not too many dark clouds on that horizon as far as I can see. I should add, though, that I am not a resource stock specialist and nor do I have a mining background.

    My investment in this and several other spec. resource stocks commenced two years ago and was based on the belief that gold (and base metals like nickel) would return to favour with a vengeance once faith in the $US dollar as the defacto global gold standard faltered. Thus far, I have seen nothing to alter my view On the contrary, I believe the momentum for gold is just gathering pace. However, I don't pretend to advise anyone as I'm well aware there are any number of contrary views on this matter.

    Good luck to all. In resource stocks I hold GDN, TIR, TAA, GIR, MTB.

    R/Gupper

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