Generation Mining Ltd. (GENM:TSX; GENMF:OTCQB; 9GN:FSE) is a palladium stock that is in a strong long-term uptrend, and has been since mid-2018 as we can see on its latest 3-year chart shown below. This is a most useful chart as it makes several positive points very clear. The first is that if the current rally continues until the price gets to the top rail of the channel, it will result in very substantial further gains from here. The second point is that it has just cleared the resistance at the early 2020 highs and made new all-time highs, which puts it in position to accelerate away to the upside. The third point is that, although it is short-term overbought, it can get a lot more overbought than it is now, as made clear by the MACD indicator shown at the bottom of the chart. These factors taken together mean that the price is free to advance, probably swiftly, towards the top rail of our channel.
Turning to the 6-month chart we see on the RSI indicator that it is critically overbought short-term on its RSI indicator, although we should note that during the course of a strong uptrend a stock can continue higher in an overbought state for quite a while, with the advance being punctuated by minor periods of consolidation of reaction, and should we see the latter the stock will be viewed as a strong buy, although it may continue higher without much of a pause. The fine parabolic uptrend shown promises to drive the price much higher before it’s done, and the great advantage of having identified it is that having done so, you know the uptrend is still on as long as the price remains above the parabola boundary, with a clear break below it being a signal to take profits and await developments.
The conclusion is that having recently broken out to new highs, Generation Mining is in an accelerating intermediate uptrend that should take it considerably higher quite quickly, and this intermediate uptrend exists within the vigorous long-term uptrend shown on our 3-year chart. Anyone holding the stock should therefore stay long and it is a strong buy on minor periods of consolidation or reaction along the way, with stops set beneath the parabolic uptrend.
Generation Mining website.
Generation Mining Ltd, GENM.TSX, GENMF on OTC, trading at C$0.89, $0.695 at 11.15 am EST on 5th January 2021.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.[NLINSERT]
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Charts provided by the author.
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.