If you listened to our interview over the weekend with Everton Resources‘ (EVR, TSX-V) President and CEO Andre Audet, you can’t help but be excited by the exploration opportunities in the Dominican Republic. This is a mining-friendly, mineralization-rich country that hosts one of the world’s largest Gold deposits – Pueblo Viejo is actually the biggest development project in the DR right now ($3 billion is being invested by Barrick and Goldcorp with production expected to commence by late next year).
We’ve already brought GoldQuest Mining (GQC, TSX-V) to the attention of our readers – in fact we added GQC to the BMR Portfolio 2 months ago and it has performed very well (it’s one of our favorites going into 2011). GoldQuest has over a decade of exploration experience in the DR and has a terrific pipeline of advanced and early stage projects. Everton is another company we like a lot in the DR (we first mentioned it several months ago when it was trading in the mid-20′s). It has a land package in excess of 300 square kilometres and its APV Property, where drilling is underway, is literally a stone’s throw from the Pueblo Viejo deposit. Tonight, John takes a look at EVR technically with a detailed chart analysis:
John: Friday, Everton Resources (EVR, TSX-V) opened at its low and during the day climbed as high as 36 cents before closing at 35 cents for a gain of 3 pennies (7.69%) on CDNX volume of 499,000 shares.
Looking at the 4-month daily chart we see that the share price broke above a horizontal trend channel on Sept. 3 at 23 cents and proceeded to climb to a high of 28 cents on Sept.16. Then it started to consolidate into a downsloping flag until Oct. 20 when it began to trade in a horizontal trend channel through Nov.5 between 24.5 cents and 26 cents. On Nov. 8, Everton broke to the upside and over the next 6 sessions it climbed to a high of 34 cents. It consolidated into a pennant over the following 9 sessions. On Friday, Everton broke to the upside out of this pennant to close at 35 cents.
There are 2 sets of Fibonacci levels shown. The first set (blue) stretches from the base at 20 cents to the 100% level at 28 cents. This is the seed wave. The first target from this seed wave is 33 cents. Also the downsloping flag declines down to the 50% level at 24 cents. This was to be expected. The next move to the upside goes to a new high of 34 cents, just one penny more than the first Fibonacci target. From that point the trading pattern becomes a consolidation continuation pennant with a blue top line and a green bottom line. Friday we saw the breakout to the upside to a new high of 36 cents.
The EMA(20) moving average is providing close bullish support. The volume on Thursday and Friday (each day) was nearly 500,000 shares, about 2x the daily average of recent sessions. This is bullish.
Looking at the Indicators:
The RSI is at 71% with a “W” formation and plenty of room to move higher - very bullish. The ADX trend indicator has the +DI (green line) pointing up at 34 and above the -DI (red line) at 9. The ADX (black line), the trend strength indicator, is at 33 and climbing. The bullish trend is increasing in strength, a very bullish orientation.
The Chaikin Money Flow (CMF) indicator shows that the buying pressure is increasing and will get stronger as the volume increases with this breakout.
Outlook: With the breakout Friday the stock price should continue to move up toward the Fibonacci target of 41 cents (this is not a BMR price target as we don’t give price targets but a theoretical near-term Fibonacci target based on technical analysis as a guide for investors). Everton is at its highest level in over 2 years and the overall technical outlook for this stock is very positive.