American Pacific Mining Corp. (USGD:CSE; USGDF:OTC) looks set to soar on the back of a rising gold price, after negative sector sentiment has hammered it down to a silly price.
It's always nice to pick up a stock that experts are raving about when, by waiting a few months, you can buy it at a little over a quarter of the price it was at earlier when they started talking about it, and such is the case with this one.
You can read about the fundamental story in Why Five Industry Experts Have This Gold Explorer on Their Radar Screens. Technically, the outlook for the stock could scarcely look better, as we will now proceed to see.
Our 8-month chart for the U.S. traded stock shows it from when it started trading back in April. After moving sideways for a few weeks from inception it went into a stubborn and rather severe downtrend that was aggravated by the worsening and terminally negative sentiment towards the sector that persisted until very recently, and only really started to improve last week. Notice, however, how upside volume has started to kick in over the past month and especially in recent days, that has driven both its volume indicators shown steeply higher. This is a very bullish development that usually precedes a change of trend, and there is certainly plenty of scope for this stock to recover after its severe decline of the past five months, and given that it is a prime takeover candidate as made plain in the article linked above, there is potential for the appreciation of the price of this stock to be very rapid indeed, as when a big buyer shows up.
All this means that there are three big reasons to buy this stock. One is that it is cheap, having lost almost three-quarters of its value from inception, two is that it has a highly prospective property in one of the richest gold mining areas in the world, three is that the sector is about to take off higher after a prolonged period of severe depression, and it is a classic takeover candidate. Wait a minute, that's four big reasons. American Pacific Mining is accordingly rated an immediate strong buy here. It trades in reasonable volumes on the OTC market and there are a relatively modest 32.5 million shares in issue.
American Pacific Mining website.
American Pacific Mining Corp, USGDF on OTC, USGD.CSX, closed at $0.08, C$0.105 on 12th October 18.
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.
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1) Clive Maund: I, or members of my immediate household or family, own shares 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. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
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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.