originally published Tuesday, November 28, 2023

All Gold & Silver Stocks

Another gold stock that staged a spectacular breakout today was Vista Gold which gained 15.2% on the US market and a stunning 22.7% on the Canadian market on which a fine large white candle appeared on its chart with it closing at the day’s high.

We bought Vista a few weeks ago on the 6th of this month following the appearance of a large bullish “dragonfly doji” candle on the chart after a prolonged downtrend that had taken the form of a bullish Falling Wedge. It turned out that our “bottom fishing” was a little early as it then proceeded to break below the low of the doji and below the lower boundary of our downtrend channel to make a new low, a classic “head fake” fooler move. After this deceptive drop a rather fine little Cup base formed which portended the dramatic breakout we witnessed today. So even though we bought it a little early and were showing a loss for a while we are now up on where we bought with the prospect of big gains ahead, so it doesn’t matter.

On the 1-year chart we can see the deceptive false break lower and also how today’s sharp rise broke it out of the long downtrend in force from early last May. Of great importance is that this happened against the background of a broad sector breakout that included the PM stock índices, GDX and many big and mid-cap gold stocks, such as Snowline Gold that we just reviewed. This was believed to be the starting gun of a major uptrend that will probably take it way above the May highs.

On the latest 3-month chart we can comfortably see recent action in much more detail, including the “dragonfly doji” that prompted us to buy, the false breakdown that followed – we had expected the price to drop towards the intraday low of the doji but not below it. Then the neat little Cup base that followed and finally today’s decisive high volume breakout from it. Notice how the price is still quite a long way below its 200-day moving average which is a measure of how oversold it still is despite today’s rise and also how it is still significantly oversold on its MACD indicator.

In the old days Vista Gold was a notorious speculative counter. Many who traded it knew almost nothing about it – often what they did know could be written on the back of a matchbox, but it didn’t matter because it always moved in response to movements in gold and the sector. It still has this attribute which is a reason why we went for it a few weeks ago, knowing that buyers would mindlessly wade in and drive it higher simply because the sector was taking off higher, and that’s what we saw with today’s big rise. If the sector takes off higher in the manner that we are expecting then Vista should make big gains and clearly even after today’s rise there is still plenty to go for.

Vista Gold website

Vista Gold Corp., VGZ, VGZ.TSX, closed at $0.38, C$0.54 on 28th November 23.

Posted at 7.30 pm EST on 28th November 23.

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 are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.