Gold Stock Looking Ready to Reverse to the Upside

Source: Clive Maund for Streetwise Reports   07/07/2021

Technical analyst Clive Maund charts Sitka Gold and explains why he sees it as a speculative buy.

Sitka Gold Corp. (SIG:CSE; SITKF:OTCQB; 1RF:FSE) is suspected to be at a low here, rather like Azarga Uranium was a few days back when we bought it ahead of its sharp rise on Friday. On its latest 6-month chart we can see that it has dropped substantially from its April peak, but latterly the rate of decline has slowed as it has approached and arrived at support at its February lows. Positive factors suggesting a high probability of it reversing to the upside here include recent new lows not being confirmed by momentum (MACD) and the relatively strong Accumulation line which has held up very well on the decline. With drilling underway at its RC gold project in the Yukon and drilling due to begin soon at its Alpha gold project in Nevada there exists the potential for positive news to get the stock moving higher, and this against the background of an improving outlook for gold due to mounting inflation.

The 42-month chart shows us the complete history of the stock on this market and the main point to observe on this chart is the big divergence between the Accumulation line and the On-balance Volume with the former strong and the latter weak. When this sort of divergence appears we go with the former as being more reliable because Accumulation is calculated on an intraday basis whereas On-balance Volume is calculated on an end of day basis and is therefore regarded as less reliable.

Sitka is therefore regarded as a speculative buy here. Even if the support at the 12 cent level is breached it is thought likely that it will snap back quickly. Sitka trades in reasonable volumes on the U.S. OTC market.

Sitka Gold Corp website.

Sitka Gold Corp., SIG.CSX, SITKF on OTC, closed at C$0.125, $0.105 on 2nd July 2021.

Originally posted on CliveMaund.com at 11.50 am EDT on 4th July 2021.

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

 

Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: Sitka Gold and Azarga Uranium. Click here for important disclosures about sponsor fees.
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Charts provided by the author.

CliveMaund.com Disclosure:
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 stock market 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.