Technical analyst Clive Maund examines Perpetua Resources Corp. to explain why he thinks the stock is a buy.
Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) is a dynamic play, and the reason we are looking at it now is because it appears that the current strong bullish momentum will continue for some time to come and if so, it will result in substantial gains in the short term. and medium term and these gains will likely occur in the short term for reasons that will quickly become apparent when we look at its 6-month chart.
The history of this stock and the reason for its recent large gains is that Perpetua Resources Received Financing Indication of Up to US$1.8 Billion from the United States Export-Import Bank for the Stibnite Gold Projectand one of the main reasons for this appears to be that the mine, once built, will also produce large quantities of antimony which is used in munitions, which is currently not produced in the United States at all.
This funding is subject to certain conditions being met, but from the looks of it, they will be. On the 6 month chart we can see that after this news was released, the price skyrocketed on the 8th of this month, but after further gains, the next day it became extremely overbought in the short term, it has stabilized at outline what looks like a bull pennant which, when completed, calls for a move of similar magnitude to the one leading up to it. The way the volume has steadily decreased as this pennant has formed indicates that it is genuine and not a peak.
So we can expect a further rise towards the resistance level in the US$9 area which would result in a quick gain of almost 50%, and this could happen in a short time given that this Pennant now closes quickly.
The 5-year chart shows us the origins of the resistance that caused the temporary halt to the advance earlier this month as well as the origins of the resistance in the US$9 area, which is our next target.
The long-term 16-year chart is interesting because it shows us that all of the 2013 action can be seen as outlining a giant base pattern, and if that's the case, it's not unreasonable to assume, given the enormous upside potential. gold's potential in the coming years, that once it manages to break through resistance in the US$9-10 area, it could rise quickly to match or even surpass its 2012 highs in the area of 37.50 US dollars.
Perpetua Resources is therefore rated as a Buy for all periods this will appeal to fast speculators who want to make a large gain quickly, and a stop can be placed below the lower limit of the Pennant, for example at US$5.45, to limit losses in the (unlikely) event that it breaks. would collapse. he.
This would probably only happen in the event that EXIM said to the company, “You know, that money we said we were going to give you to build this mine? Well, you won't get it.
This seems highly unlikely.
Perpetua' Resources website
Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) closed at US$5.46, CA$7.54 on April 30, 2024
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Important Disclosures:
- Perpetua Resources Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee of between US$4,000 and US$5,000.
- Clive Maund: I determined which companies would be included in this article based on my research and understanding of the industry.
- The statements and opinions expressed are those of the author and not of Streetwise Reports, Street Smart or their principals. The author is entirely responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or distribute this article. Streetwise Reports requires contributing authors to disclose any ownership or economic relationships with the companies they write about. Full author disclosures can be found below. Streetwise Reports relies on authors to provide this information accurately and Streetwise Reports has no way of verifying its accuracy.
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Clivemaund.com Disclosures
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 do not constitute a recommendation or offer to buy or sell any security. Because trading and investing in any financial market may involve significant risk of loss, Mr. Maund recommends that you consult a qualified investment advisor, licensed by the appropriate regulatory bodies in your jurisdiction, and make your own due diligence and your own research when making any kind of transactions. of a transaction with financial consequences. Although qualified and experienced stock analyst, Clive Maund is not a licensed securities advisor. Therefore, Mr. Maund's opinions on the market and stocks should not be construed solely as a recommendation or solicitation to buy and sell securities.