I have been asked to comment on Great Bear Resources Ltd. (GBR:TSX.V) following its high grade gold discovery at Red Lake in Ontario. Great Bear rocketed higher in August on positive drilling results, about tripling in price, as we can see on its latest 6-month chart below.
The move was powerfully bullish as it was accompanied by a large gap and huge volume. Because of this, the pattern that has formed over the past six weeks is regarded as a consolidation, not a top, although superficially it looks like a small Head-and-Shoulders top, it is instead thought to be a bull Flag/Pennant. This view is given credence by the bullish dieback in volume as the pattern has formed, and with the MACD having largely neutralized and the 50-day moving average catching up with the price, there is gas in the tank for another big move.
Another big upleg is therefore considered to be imminent, as the consolidation is mature, and the stock is rated an immediate speculative buy as a momentum play, since the huge volume and big gap on the initial run-up imply that it has considerably further to go before it's done. Place a stop at C$1.58 or get out if this level is hit in case this interpretation is wrong. The stock trades in good volumes on the US OTC market and there are a reasonable 34 million shares in issue.
Great Bear Resources website.
Great Bear Resources Ltd, GBR.V, GTBDF on OTC, closed at C$1.88, $1.41 on 3rd October 2018.
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.