I consider Aben Resources Ltd. (ABN:TSX.V; ABNAF:OTCQB) to be among the best in the Golden Triangle. Note that the seasonal speculative spikes that we are expecting in these stocks may not get underway until the late summer, so this is more about positioning at good prices ahead of time.
Aben Resources is shaping up nicely for its traditional summer drilling season ramp, which has happened like clockwork during the past three summers. We cottoned on to this annual cycle last year and rode its last ramp, selling half of our holding very near to the top. The reason that Aben and other Golden Triangle stocks have this annual cycle is that drilling ceases during the brutal British Columbia winter and restarts in the spring, so speculators get bored during the winter months when the stock price suffers from attrition selling with few buyers around. Aware of this, we put our best foot forward and bought in back last November, right after it plunged at the point shown on the 6-month chart below, figuring that it was either at or close to its winter low, and that turned out to be the case, so we are now up 50% on this purchase already with much more to come if past behavior is anything to go by. We bought it again in March but this purchase was not so well timed. Even so, we are up.
A moderate uptrend appears to have become established in Aben and within this uptrend a quite sharp rally occurred a couple of weeks ago, with the price then reacting back within what looks like a bull Flag that we will now look at in more detail on the 3-month chart.
On the 3-month chart we can examine the supposed bull Flag of the past couple of weeks in more detail, and bearing in mind how the sector dropped quite hard over the past several weeks, this looks like a ball being pushed underwater here. It looks like a countertrend reaction, especially as volume has dwindled to become light, which is characteristic of a valid Flag. While we cannot rule out a minor short-term dip to the lower Flag boundary, basically it looks about ready for another sharp upleg probably to the upper boundary of the channel. It is therefore rated an immediate buy again here.
The longer-term 3-year chart shows a remarkable chain of regular drilling season spikes occurring during the late summer, early fall. While there is no guarantee that we will see another one this year it is considered likely, and it certainly looks like it is shaping up for one.
The final point and the main point to make about Aben here, is that it looks like it is building up to another dramatic summer spike which is most likely in the July–September timeframe, and will obviously involve it blasting out the top of the channel shown on our charts. That is what we are positioning ourselves for with this. The point to become concerned if it should start to shown signs of deterioration would be if it broke down from the channel and then below the support shown in the 19 cent area. That is not expected to happen but is worth mentioning. Otherwise it looks like is on course for another speculative summer ramp, and is believed to be at another good entry point here.
Aben Resources website.
Aben Resources Ltd, ABN.V, ABNAF on OTC, closed at C$0.21, $0.166 on 26th April 19.
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The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.