Technical analyst Clive Maund charts a silver explorer that he believes is at a good entry point.
Silver Bull Resources Inc. (SVB:TSX; SVBL:NYSE.MKT) was included in Friday's article, Four Resource Stocks to Buy Now When the Stock Market Is Down, and the part about Silver Bull read as follows:
"Silver Bull Resources Inc. (SVB:TSX; SVBL:NYSE.MKT), C$0.185, $0.15, is now at an excellent entry point. Coeur Mines finished selling its holdings in the stock a while back and the stock has been kept in check by some selling of warrants. However, the company announced a significant discovery last month, and management is about to change out of their scruffy old jeans and T-shirts, put on sharp suits and head for PDAC where the big miners will be present with their checkbooks looking for better juniors to invest in or buy, like this one. Technically Silver Bull is at a great entry point as it is in a strong overall uptrend and at support, and you may recall that we have been buying it on dips in recent weeks.
It wasn't written up on Friday, as the other three stocks in the Email were, due to time limitations and the fact that it was considered a little less urgent than the other three.
We have been accumulating Silver Bull this year on minor weakness because this is a stock that is already in an established uptrend and looks set to do very well indeed during silver's expected major bull market, and we looked at silver's bright prospects in yesterday's Silver Special Commemorative Update.
Last month the company reported very good results from a drilling program, with Tim Barry, president, chief executive officer and director of Silver Bull commenting "We are extremely pleased with the results from this batch of drilling. The new sulphide zone is proving to be very productive for high-grade sulphide mineralization. The drilling summarized in this news release targeted the second of three steeply dipping, discrete structures we have identified in the sulphide zone. Drilling from the first structure announced in the previous news releases of holes T17001 to T17014 were dominated by high-grade silver-copper sulphide mineralization grading up 1,300 g/t silver and 6 per cent copper. A second structure defined by holes T17010 and T17018 to T17022 is dominated by extremely high zinc sulphide mineralization, grading up to 48 per cent zinc and suggests a metal zonation in the mineralization. In addition to the area currently being drilled we have opened up an additional 350 metres of historical workings along the east-west trend of the sulphide mineralization which was announced in January, 2018. This channel sampling program clearly shows the continuation of high-grade mineralization towards the west. Our underground geological mapping of this area shows a number of high-angle structures up to two metres wide containing sulphide mineralization grading up to 1,300 grams per tonne silver, 42 per cent zinc, 18 per cent lead and 13 per cent copper that appear to feed into the overlying oxide zone. This will be the next target of our drill program in this area."
The stock didn't move much on this news, but as stated in the update on Friday it has been held in check by some warrant selling, and also by the depression continuing to afflict the silver sector that as we saw yesterday should end very soon. So how does the latest stock chart for Silver Bull look?
Silver Bull's latest 6-month chart looks very positive indeed, with the gentle reaction that has been going on for about 7 weeks now being a normal correction to the sharp run-up at the start of the year, which we rode. This reaction has fully unwound the earlier overbought condition and brought the price back down to an important zone of support where it appears to be stabilizing above a line of support at C$0.18 in readiness for a new uptrend soon. We went for it again on 13th February. Volume has contracted in a most satisfactory manner, which is why the Accum-Distrib line has remained buoyant. Moving averages are in bullish alignment and with the price in the vicinity of its rising 50-day moving average, everything appears to be in place for a new uptrend to begin, which may well coincide with a breakout by silver from its giant base pattern.
The conclusion therefore is that Silver Bull is a strong buy here and holders should of course stay long. It trades in very good volumes on the US OTC market.
Silver Bull Resources, SVB.TSX, SVBL on OTC, closed at C$0.20, $0.15 on 2nd March 18.
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.
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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.
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