Group Ten Metals is a palladium / platinum play that is working out well for us. We were accumulating it last year around the time that it was marking out the 2nd low of a large Double Bottom formation, which we can see to advantage on its 2-year chart below. Since that time it has risen towards the upper boundary of this pattern, and yesterday it succeeded in breaking out of it on strong volume, which is self-evidently a bullish development, and this breakout was apparently triggered by a very positive update on the company by Mr Bob Moriarty of 321gold.com
On the 6-month chart we can see that the sharp rise of the past 2 days has resulted in a short-term overbought condition, so it could obviously react back somewhat, although we might see some further upside first. The breakout move involved a gap, so it would be quite normal for it to react back close to the top of this gap. The overall picture is strong so it makes no sense to sell here just when it’s really getting start, instead the right tactics are to buy on any dips or add to existing positions.
How far is this stock likely to advance once it really gets moving? The long-term 8-year chart can help us to get an idea. On this chart we see that the Double Bottom that we viewed on the 2-year chart is actually part of a gigantic base that goes back to 2013 and follows a long and severe bearmarket which goes back much further than shown on this chart, and we aren’t including this entire time period because it would squash the base pattern flat on the chart and make it unintelligible. This chart also reveals that Group Ten has a tendency to spike and it could very well do so again, especially as it has a relatively modest 32.7 million shares in issue. If it succeeds in breaking out above the resistance at the top of the larger base pattern, i.e. above the 2016 highs, then it could take off a rocket, perhaps running up to C$2.00 or higher, which is very possible given themodest number of shares in issue as just mentioned and the exceptionally bullish outlook for the metals it mines, palladium and platinum, which will be in huge demand due to the growth in production of electric vehicles and alternative energy at a time when South Africa, the main producer of platinum is a serious contender to be the new Zimbabwe, i.e. an anarchy stricken basket case.
Group Ten Metals website.
Group Ten Metals Inc., PGE.V, PGEZF on OTC, trading at C$0.245, $0.195 at 1.15 pm on 16th January 20.
Posted at 1.55 pm EST on 16th January 20.