It seemed like it was a smart move to take profits in Snowline Gold Corp. (SGD:CSE; SNWGF:OTCQB) back on June 6, and if we'd bought it back a week later, it would have been, but after reacting back briefly it has turned higher again so that it is now challenging its all-time highs. On the latest 6-month chart we can see the point marked where we took profits, the dip that followed and then how it turned up again and rose to reach the top of the uptrend channel again.
Now normally, we would consider this to be another point to take profits, but there are a number of important factors which suggest that instead of backing off or backing off much, the price is likely to break out of the top of this uptrend into a period of dramatic acceleration.
One big one that we can see on this chart is the preponderance of upside volume over the past several weeks, with downside volume all but drying up completely — people aren't selling, and for a good reason, and at the same time, buyers are becoming more aggressive. This suggests that we may be on the verge of dramatic upside acceleration. Before leaving this chart, observe how the recent strong upside volume has driven the Accumulation line way higher, which is, of course, bullish.
On the 3-year chart, it quickly becomes clear why the price could soon accelerate into a near-vertical spike — it arrived at key resistance at two earlier important peaks, one in August of last year and one in December of last year, so if it can succeed in breaking above these highs there will be "no stopping it."
Normally we would be wary at this point because of the obvious risk that we could be at the third peak of a potential Triple Top, but the strong volume pattern and Accumulation line make it very likely that it will instead break out soon to new highs and this scenario will not be derailed by a minor dip first, meaning that the entire pattern is a consolidation, not a top that will lead to renewed vigorous advance.
Fundamentally there is every reason to expect the bull market in Snowline to continue. Good news has been gushing out the company non-stop for weeks, with it late in March announcing the completion of a CA$19.16 million financing from B2 Gold, the commencement of trading on the TSX Venture Exchange on May 4, the announcement on June 6 that B2 Gold is to increase its stake in the company to 9.9% MET tests recovering up to 96% AU at the Rogue project and lastly continuing good drilling results with news on the fifth of this month that 418.3 meters of 1.9 grams / ton AU has been found at Rogue from the first hole at the Valley target and this is just the start of the season.
Finally, an important background factor that should provide a tailwind is that, despite some weakness this morning, the entire sector looks set to advance soon following its recent correction, so this morning's dip may provide a slightly better entry point for buyers.
Snowline Gold's website.
Snowline Gold Corp. closed at CA$3.98, $2.99 on July 7, 2023.
Originally published on clivemaund.com on July 10, 2023, at 9:00 am EDT.
Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.
- 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.
- 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.
For additional disclosures, please click here.
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.