Given that the fundamentals for Omineca are actually pretty good, its stock as viewed as most attractive here at its current very low price, which is due to a combination of the recent slump in the sector with the weakness in recent days as the sector has recovered suspected to be for capital markets reasons. The technical setup for the stock is actually simple and easy to describe and therefore won’t take long.
On the 5-year chart we can see that after a tremendous spike in 2020 the price reversed into a bearmarket that was initially steep but then settled into a more steady and drawn out decline. After looking like it was basing for about a year between May of last year and May of this year it broke lower and dropped even further. This prompted us to step out of the shadows and buy it late in July figuring that it had become silly-cheap, but after rallying towards its 200-day moving average after we bought, it dropped back again and even made a new intraday low yesterday (albeit not by much), but after bouncing back strongly later in the session it is now evident on its 6-month chart that what it has done is form a Double Bottom with its June lows.
As mentioned above the weakness of recent days as the sector has rallied is suspected to be due to capital market factors that may soon become more clear. Going on Omineca’s charts alone it looks like it is at a great entry point being as it is very close to what is believed to be the 2nd low of a final Double Bottom that has formed at a very low level and the newly started gold drilling program at its Wingdam project is thought likely to generate more interest with passing time.
Omineca is therefore rated an immediate strong speculative buy here.
Omineca Mining & Metals website
Omineca Mining & Metals Ltd, OMM.V, OMMSF on OTC, closed at C$0.10, C$0.073 on 22nd July 22.
