This is believed to be a good point to buy or add to positions in Dakota Gold Corp. (DC:NYSE American) after its retreat in recent weeks back to what is believed to be an intermediate cyclical low at a zone of strong support.
Two 6-month charts for it are presented below because I cannot fit all the technical indicators I want to show for it on one chart. On both of these charts, we see that after the stock came to market in its new form early in April, it dropped quite steeply before settling into a rectangular trading range.
This could be a continuation pattern, meaning that it could break down from it and drop again, but it is instead believed to be a basing pattern because of the promising fundamental prospects for the company and because the sector is believed to be at or close to an important low, for reasons for out in the update on silver last night.
Technical factors suggesting a rally from about here at least to the top of the trading range include the positive volume indicators — the Accumulation line is shown on this chart and On-balance Volume on the second chart — which have been trending higher since their freak drop in mid-June caused by a suspected cross trade, which is thus viewed as an anomaly, and the MACD histogram (bars) at a deeply oversold reading.
The second 6-month chart shows the On-balance Volume line at the top, which has trended higher in a similar manner to the Accumulation line since the freak drop in mid-June, and we can see the huge volume on one day in mid-June associated with that drop.
With respect to the volume pattern, we see that volume has been light on the retreat from early August, which is because this drop was largely due to the sector declining during this period, meaning that if the sector picks up soon as expected, then Dakota should too.
Dakota Gold Corp.'s website.
Dakota Gold Corp. closed at $3.09 on September 2, 2022.
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CliveMaund.com Disclosures
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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1) Clive Maund: I, or members of my immediate household or family, own securities 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.
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