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Americo Santos holds leads at the Viarco factory in Sao Joao da Madeira, northern Portugal April 10, 2007. Viarco, a century-old pencil factory in Portugal, struggling to keep up with today's needs, says it has invented a new type of paint from the graphite used in pencils that may change the way artists work. (NACHO DOCE/REUTERS)
Americo Santos holds leads at the Viarco factory in Sao Joao da Madeira, northern Portugal April 10, 2007. Viarco, a century-old pencil factory in Portugal, struggling to keep up with today's needs, says it has invented a new type of paint from the graphite used in pencils that may change the way artists work. (NACHO DOCE/REUTERS)

Schizas’ Mailbag

Zenyatta Ventures is testing support Add to ...

Lou:

Great column and your advice is always useful. I would really appreciate your opinion on Zenyatta Ventures.

Thanks,

Gavin

Hey Gavin,

Thanks for your kind words and the assignment. I was first introduced to Zenyatta Ventures Ltd. when George Tsiolis, Host of the iChannel TV program ” The Next Big Winner” asked me to appear as a guest. It just so happened that Donald Bubar, who is a member of the company’s advisory board, was also a guest that week. The time I spent in the green room and on set provided me with everything I ever wanted to know about graphite’s industrial uses and the purity of the company’s deposit located northeast of Geraldton, Ontario.

More Related to this Story

A review of the charts will inform my opinion on ZEN.

The three-year chart indicates that the stock generated great gains for investors who picked it up as it started its advance in August of 2012 when it was trading near $0.15. There was a golden cross that surfaced in early October of 2012 when the shares were trading near $0.50, signalling that there was more to come and boy did it come, reaching a 52-week high of $5.00 within a year.

The RSI and the MACD both signalled a sell as the stock peaked and began a retreat that retested support at $2.00 when the momentum indicators then signalled a buy. The shares caught a bounce off of $2.00 and moved higher until it met resistance near $3.50.

The six-month chart illustrates the overbought condition that prevailed from June of 2013 through late July and the subsequent decline that followed as the RSI and MACD turned lower. There is also the close up of the buy signal generated by the momentum indicators in October. At this point in time it appears that the the shares are retesting support at $3.00.

From the research conducted on your behalf you need to understand the risk associated with ZEN. They have a deposit which is providing great samples but they don’t have a mine yet. The company has $9-million in cash and is fully funded through 2014. If you like the story, start to accumulate within the speculative portion of your portfolio.

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it in to lschizas@globeandmail.com.

 
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