One of the bright spots amongst our stocks has been Aben Resources, a Golden Triangle BC exploration stock that was expected to benefit from the usual seasonal rally in these speculative plays. The good news is that it has easily fulfilled our expectations thanks to its first drill hole returning excellent results, as announced earlier this month. This caused the stock to spike dramatically on huge volume, which has major bullish implications for the longer-term. While the high volume gap higher does indicate scope for further gains before the drilling season ends, the overbought condition and looming end of the drilling season, when interest wanes, means that there is a growing temptation for holders to take profits and knock the price back down, which is a bigger risk in the case of Aben as the weak Accum line is a sign of Smart Money selling into strength. So with the favorable price on offer following the rally of the past couple of days, which looks like an unconvincing break higher from a bull Flag, we might as well be at the front of the line and take partial profits here - we are up over 3-fold on our initial purchase at C$0.13 in the Spring. So it is recommended to sell half of a holding and let the rest run, but sell the remainder no later than late Sept - early Oct, depending on what happens.
The 3-month chart below shows the powerful breaks higher earlier this month, but the unconvincing break higher from the bull Flag a couple of days ago which suggests that the advance could peter out and reverse, especially as the Accum line is weak.
The long-term chart shows the chain of drilling season runups that inspited our purchase of the stock in the Spring.. As we can also see, when the season ends and the drillers return to town to hang around in bars and brothels, investors lose interest and the stock can drop back hard on profit taking. This is why if holding you should sell half now, and hold out no longer with the rest than late Sept - early Oct, and maybe sell sooner if it weakens.
Aben Resources
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Aben Resources Ltd, ABN.V, ABNAF on OTC, closed at C$0.43, $0.33 on 22nd August 18.
Posted at 9.25 am EDT on 23rd August 18.