The action in GoldQuest (GQC, TSX-V) this morning underscores an important broader point – how critical it is to take advantage of temporary weakness in quality situations in order to make potential HUGE gains. We have been stressing this fact with our favorite exploration play, Rainbow Resources (RBW, TSX-V), and as a general overall principle – the best opportunities come in the darkest hours, like we’ve been experiencing in the markets over the past while.
What GoldQuest also demonstrates is that one still can’t beat the potential massive gains from exploration discoveries. GQC could have been picked up for a paltry 6 pennies 24 hours ago and we mentioned this to our readers in yesterday’s Morning Musings. It has more than quadrupled in one day.
More on Rainbow below which has the potential of becoming the next hot exploration story based on geological common sense. First, John has an intra-day chart for GQC which has been as high as 35 cents this morning. The Fibonacci .31 area seems to be key. As of 8:23 am Pacific, GQC is up 22.5 cents at 30 cents on total volume of 13.5 million shares.
And here’s another chart looking at just today’s activity…
Rainbow Resources (RBW, TSX-V)
Rainbow will soon commence drilling at its Big Strike Project with assay results also expected any day from initial sampling at its Jewel Ridge Gold-Silver Property in Nevada. In addition, RBW has had crews on the ground in the West Kootenays for a couple of weeks now and we believe there’s a good chance of a prospecting discovery considering how mineral-rich this area is.
Rainbow’s chart is still looking very favorable overall, and the stock is currently trading at the lower end of its recent range between 15 and 20 cents – that presents opportunity. As of 8:23 am Pacific, RBW is unchanged at 16.5 cents with RSI(14) showing signs of developing into a bullish “W” formation.
GoldQuest has made an important discovery in the DR. The prolific and under-explored West Kootenay region of southeast British Columbia is where we expect another important discovery, and Rainbow is clearly the leader in that area.
Zenyatta Ventures (ZEN, TSX-V)
This graphite play reported nice results this morning – a 450-metre step-out hole returned 6.6% graphite over 170 metres…it’s good exploration results like this that will help power the Venture higher. ZEN is up 6 cents at 39 cents as of 8:23 am Pacific.