Hey Lou,
What do you think about Noront Resources Ltd? It seems that due to all the negative news it went so low, that perhaps it can go only up from here. Thank you so much in advance.
Best wishes,
Alex
Hey Alex,
Thanks for the assignment.
This will be the third time that I inspect the charts for Noront Resources Ltd. (NOT). The last time was on March 2, 2011, on a request from Sheldon. The shares were trading for $0.78 and had been in a long-term retreat that started in August of 2009. The conclusion of the analysis was not to be too anxious to jump on the band wagon. Retrospectively that was the correct conclusion as the shares fell to $0.43 by September of 2011.
The biggest road block for the development of the company's land position in the Ring of Fire is the paucity of infrastructure. Cliffs Natural Resources Inc. shelved its project in the Ring of Fire on the lack of progress in getting a road built to the area. It also hasn't helped that the mining sector has been knocked back on its heels as commodity prices have softened on slowing growth in China.
Scrutinizing the charts will better inform my thoughts on NOT.
The three-year chart indicates that NOT had a great run from a 52-week low of $0.15 in early December of 2013 which topped out at the 52-week high of $0.70 in May of 2014. Since the May high the stock has been in a steady decline and is meeting resistance all along the 50-day moving average. Also worth mentioning is the death cross that formed in October of 2014 which alerted investors to expect continued selling pressure.
The six-month chart provides a close-up of the resistance along the downtrend line and the 50-day moving average. At the time of this posting there are no signals that the downtrend is about to reverse itself.
The Ring of Fire is a proven mining district which will remain stranded until road access to the site is financed and first nations concerns are satisfied. All things considered I might suggest that the best strategy at this juncture would be a tax loss sale and a review early in the new year.
Make it a profitable day and happy capitalism!
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