After a severe downtrend from its mid-April highs that cut its price about in half, Western Exploration Inc. (WEX:TSX.V;WEXPF:OTC) looks like a Buy here for a reversal into a recovery. On its 5-month chart below, this downtrend looks "long in the tooth," especially as the sector has just started to take off higher to begin what should turn out to be a substantial uptrend.
What "kicked the ball downhill" was a big private placement at CA$1.55 that is now closed, but what this also means is that the stock is now cheap as it is currently trading at a significantly lower level.
Although it hasn't yet broken out of the downtrend, it looks like it is at a cyclical low and the appearance of a couple of prominent bull hammers on the chart last week, doubtless due to the general improvement across the sector, shows that it is at least "thinking about it" and despite the recent weak volume pattern and Accumulation line should do it soon, whereupon we will probably at last see the volume pattern and Accumulation improve and a breakout from this long and persistent downtrend is likely to cause an abrupt change in sentiment that leads to a significant advance.
The positive news out of the company on the 10th of this month of 69.3% gold extraction at Doby George was greeted by the market with a yawn. Here is an article going into more detail about the company and its operations.
Western Exploration is therefore rated a Speculative Buy here.
The stock is very thinly traded on the US OTC market, so ideally, it should be bought on the Canadian market, but if buying on the U.S. market, be sure to use limit orders. There are 40.4 million shares in issue, fully diluted, but it is important to be cognizant of the fact that Strategic Investors hold 74% of the stock, and other institutions 10%, and with management holding 7%, that only leaves 9% of the stock available for retail investors. What this means is that it is very tightly held, so it won't take much of an increase in demand to drive the stock sharply higher.
Western Exploration's website.
Western Exploration Inc. closed at CA$1.22, $0.86 on July 14, 2023.
Originally published on clivemaund.com on July 17, 2023, at 8:10 am EDT.
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Important Disclosures:
- Western Exploration Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Western Exploration Inc. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Western Exploration Inc.
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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.
