BullMarketRun.ca

6:15 am Pacific

Richfield Ventures (RVC, TSX-V) has reported some outstanding results this morning from its Blackwater Project in central British Columbia.  The company released assay results on 6 additional holes including BW-71 which intersected 281 metres grading 1.41 g/t Au.  The results this morning extend Blackwater to the east and west.  More later in our BMR Morning Market Musings.

John: Today, Sidon International Resources (SD, TSX-V) opened at 11 cents and closed at 11.5 cents, its high for the day, on relatively light CDNX volume of 380,000 shares.  Any investor watching the daily trading for the past few weeks may have come to the conclusion that this stock is drifting lower and weakening with no end in sight.  The chart, however, tells a different story as I explain below:

Looking at the 6 month daily chart we see that starting on July 9,  Sidon rose from 6.5 cents to 16 cents in just 9 trading sessions (this is called the seed wave), then consolidated down to the 50% retracement level (Fibonacci levels shown as horizontal blue bars) of 11 cents which formed strong support (green horizontal line).  Then in 3 trading sessions on July 28, 29 and 30, it climbed from 11 cents to 18 cents and from there drifted down to settle at its previous strong support of 11 cents which is where it traded today.  Also, we see that the daily SMA(50) is providing strong support at 11 cents.

When a stock moves up very quickly from support as Sidon did, it gets too far from its supporting moving averages – thus its momentum is unsustainable. Today’s trading shows the stock has indeed stabilized and is now able to move up on good news, though keep in mind the company is in the process of completing a small financing ($1.2 million) at 10 cents so the next big move in SD (to new highs) is not likely to occur until that is finalized and out of the way.

We see that the 3 days prior to today were doji candles showing indecision between the buyers and the sellers, and then today we have a small white bullish candle, a possible bullish reversal which must be confirmed by another white candle tomorrow (Thursday).

Looking at the indicators:

The RSI is presently just below the 50% level and is turning up. We see that a divergence occurred when Sidon rose to 18 cents, indicating that a price decline was imminent.   The average volume has been decreasing from July 9 to today. This has been a period when previous financing stock has been distributed and now that overhang of stock has gone.

The Slow Stochastics %K (black line) and the %D (red line) are together below 20%, thus with good news the stock has excellent potential to run higher.

The Chaikin Money Flow (CMF) indicator is now back in the green (bullish), showing that buying pressure is starting to build.

Outlook: Sidon is trading at strong support and all indicators show that this stock is ready to move up on good news.  The technical outlook combined with the fundamentals of an interesting gold play in Tanzania create a very bullish scenario.

From Montreal, 5:30 am eastern

Gold enjoyed a strong day yesterday and is up again this morning…as of 5:30 am eastern, the yellow metal is ahead another $2 an ounce to $1,250…the TSX Gold Index hit a record high yesterday, 403.47, while the CDNX closed at 1500 on heavy volume after getting as high as 1508…as we’ve mentioned, the CDNX has some heavy resistance to overcome between 1500 (the June high) and 1515 (the May 31 high, just above the rising 200-day SMA)…it’s impossible of course to say exactly when the CDNX will blast through this resistance but we’re certain that it will, and quite possibly even by the end of this week…as luck would have it, we were traveling around rural Quebec near Trois Rivieres and visiting a mining property (a very intriguing one) when the Gold Bullion Development (GBB, TSX-V) news broke yesterday, so our apologies for not being able to comment earlier on BMR about the news…Gold Bullion powered higher and finished the day up a nickel to 58 cents on total CDNX volume of 1.3 million shares (today, we are returning to the west coast, hence our early Morning Market Musings)…geologically, yesterday’s Gold Bullion news was highly significant as the mineralization picture gets bigger at Granada which has implications for volume (tonnage) and potential ounces…we know now that GBB is intersecting significant concentrations of Gold, associated with pyrite and arsenopyrite, in feldspar porphyry intrusions in the LONG Bars Zone eastern extension…mineralization is being carried not just in quartz veins but in this important intrusive rock (feldspar porphyry), especially over the northern half of the area to the east of the Preliminary Block Model…Gold Bullion also stated it will be releasing additional assay results from Phase 2 drilling sometime next week…that timing is interesting because it’s after Labour Day when vacations have ended and there is more focus on the market…Gold Bullion must be confident it will have good news to report…yesterday’s news also revealed that they have dotted the “i’s” and crossed the “t’s” with Mousseau Tremblay on the Granada land package which has grown significantly for GBB this year – again, another very positive sign…as we stressed after our LONG Bars Zone visit last week, Gold Bullion continues to advance Granada in a very strategic, efficient, systematic, forward-thinking and effective way…this is such an incredibly exciting project with multi-million ounce potential…with rising Gold prices and the expectation of a surging CDNX, September could be a major breakout month for Gold Bullion if Phase 2 results are good (based on the clues Gold Bullion has given investors over the last 6 weeks, we have every reason to believe results will be very positive)…Seafield Resources (SFF, TSX-V) has the potential for a powerful September as well with exploration news expected from its Quinchia Project in Colombia…Seafield has firmed up on improving volume over the last 5 trading sessions and closed yesterday at 18 cents…we’re watching Richfield Ventures (RVC, TSX-V) closely as it’s expected to release additional results this week from drilling at its Blackwater Property in central British Columbia…Richfield finished yesterday at $1.86 and has put together two consecutive strong months (August and July)…Sidon International (SD, TSX-V) is forming a nice base just above major technical support at 10 cents where the company is completing a financing of $1.2 million…Sidon closed yesterday at 11 cents, its 50-day SMA, and we continue to be very bullish on SD (we’ll be commenting more on SD tomorrow given some of our readers’ recent emails to us)…we visited Excel’s (EGM, TSX-V) Montauban Mining Camp Project yesterday and it was a fascinating visit…we’ll be reporting more on Excel in the coming days…it closed yesterday at 15 cents and has strong technical support from a rising 50-day SMA at 14 cents…