Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Tech Analyst Says Buy This Gold Co. Without Fear
Contributed Opinion

Share on Stocktwits


Technical analyst Clive Maund reviews the 6-month, 2-year, and 4-year charts for Snowline Gold Corp. to tell you why he believes it is a Buy.

Snowline Gold Corp. (SGD:CSE; SNWGF:OTCQB) has firmed up nicely since it was mentioned on the site as looking attractive in an update on X-Terra Resources posted on the 26th, with a couple of bullish white candles appearing on the chart where it closed at the day’s high, as we can see on the latest 6-month chart below. This tends to confirm our suspicion that it is about to reverse off the support at the lower boundary of the large trading range that has formed from the peak last August, following last year’s big runup.

You may recall that we rode part of last year’s big runup but sold way too early. Other bullish factors coming into play that we can see on this chart are the relatively strong Accumulation line which has picked up well over the past couple of days, the diminution of downside volume as the prior correction has progressed, the 200-day moving average now catching up to support the renewed advance and the MACD indicator now crossing its moving average for the first time in many weeks with the MACD histogram (bars) crossing the zero line into positive territory which is strongly supportive of an immediate rally.

With all these positive factors in play and the price firming up but not having moved much yet, it is still a strong buy here, and a stop can always be placed beneath the support just in case it breaks down.

On the 2-year log chart, we can see that the recent correction has not broken the price down from the strong, steady uptrend in force from the middle of 2021. The powerful rally last year caused it to “get ahead of itself” as it popped out of the top of the channel to become massively overbought on its MACD, hence the subsequent long rectangular consolidation to digest this move.

Could the pattern from last August be a top?

Whilst we can’t entirely rule out the possibility given that momentum has seemingly broken down, the strong Accumulation line and now bright outlook for the sector make it unlikely, and the other side of the coin is that the now quite deeply oversold condition has created a high degree of “compression” that could springboard the price much higher from here. The right way to handle this setup, therefore, is to buy as much as you want here without fear because you can protect yourself by placing a stop beneath the nearby support just in case.

Lastly, the 4-year chart shows us that the upside potential for Snowline is even bigger than one might think looking solely at the shorter-term charts, for on this chart, we see that it may be adhering to the parabolic uptrend shown, and if this parabolic uptrend holds it could slingshot the price too much higher levels, which of course implies that the entire sector is headed much higher — hardly surprising when one considers what is going on in the world and the grim outlook for the dollar which is well along the road now to losing its reserve currency status.

Snowline Gold is therefore regarded as a strong Buy here and positions can be protected by the simple expedient of placing a stop beneath the nearby support. Note that if Big Money should run these stops by briefly forcing the price beneath the support in order to shake people out and mop up their holdings, but it then bounces back above the support, any liquidated positions should be bought back.

Snowline Gold's website.

Snowline Gold Corp. closed at CA$2.64, $1.98 on January 27, 2023.

Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe Disclosures

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.

1) Clive Maund: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Snowline Gold Corp., a company mentioned in this article.

Want to read more about Gold investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe