I have been asked to comment on Great Bear Resources following its high grade gold discovery at Red Lake in Ontario. Great Bear rocketed higher in August on positive drilling results, about tripling in price, as we can see on its latest 6-month chart below. The move was powerfully bullish as it was accompanied by a large gap and huge volume. Because of this, the pattern that has formed over the past 6 weeks is regarded as a consolidation, not a top, although superficially it looks like a small Head-and-Shoulders top, it is instead thought to be a bull Flag / Pennant. This view is given credence by the bullish dieback in volume as the pattern has formed, and with the MACD having largely neutralized and the 50-day moving average catching up with the price, there is gas in the tank for another big move.
Another big upleg is therefore considered to be imminent, as the consolidation is mature, and the stock is rated an immediate speculative buy as a momentum play, since the huge volume and big gap on the initial runup imply that it has considerably further to go before it’s done. Place a stop at C$1.58 or get out if this level is hit in case this interpretation is wrong. The stock trades in good volumes on the US OTC market and there are a reasonable 34 million shares in issue.
Great Bear Resources website
Great Bear Resources Ltd, GBR.V, GTBDF on OTC, closed at C$1.88, $1.41 on 3rd October 18.
Posted at 5.50 am EDT on 4th October 18.