daytrades april 18 pre-market, page-3

Aksier's Weekly Update:

The Scorecard from Friday / The Past Week
Markets
XJO 4,852.1 points, -32.1 points, Down 0.7% / -88.5 points, Down 1.8%
DJIA 12,341.8 points, +56.7 points, Up 0.5% / -38.3 points, Down 0.3%
SPX 1,319.7 points, +5.2 Points, Up 0.4% / -8.5 points, Down 0.6%
NASDAQ 2,764.7, +4.4 points, Up 0.2% / -15.7 points, Down 0.6%
FTSE 5,996.0 points, +32.2 points, Up 0.5% / -59.8 points, Down 1.0%
DAX 7,178.3 points, +31.7 points, Up 0.4% / -38.7 points, Down 0.5%
Hang Seng HSI 24,008.1 points +5.7 points, Up 0.0% / -388.0 points, Down 1.6%
Nikkei 9,591.5 points -62.4 points, Down 0.7% / -176.6 points, Down 1.8%
Shanghai 3,050.8 points +8.1 points, Up 0.3% / +20.7 points, Up 0.7%

Key Commodities
Gold +$12.40 to $1,486.90, Up 0.7% / +$11.40, Up 0.8%
Silver +$0.87 to $43.06, Up 2.1% / +$2.12, Up 5.2%
Oil USD +$1.28 to $109.66, Up 1.2% / -$3.39, Down 3.0%
Copper USD -$0.03/lb to $4.25, Down 0.6% / -$0.25, Down 5.6%


Market Direction XJO: Finally the XJO saw some profit taking in the second half of last week after a stellar "V" shaped recovery from the sell of which commenced immediately after the Japanese earthquake. On Friday the index fell back through the bottom of the trading wedge however, the slow stochastic is approaching oversold and with a positive lead from offshore markets on Friday night, and strong precious metal and energy prices I expect the XJO to try to re-enter the bottom of the wedge when trading resumes this morning. The volume was declining during the profit taking late last week which is a positive sign. Beyond today there are a couple of warning signs to watch out for on the chart. Firstly, there is a potential double top formation on the chart. Secondly, the MACD looks set to cross down through its signal line this week. In order for the current rally to continue the market will need to break the February high which will rule out the double top scenario.



The USD continued to trend down against the basket of currencies making up the USD index. The resolution of the budget crisis failed to instill much support for the USD. I believe that QE2 will continue to take its toll on the strength of the US dollar as more currency goes into circulation. As shown on the monthly chart below, if support just above 74 fails to hold then the currency is likely to test its next support level just above 72 relatively soon.



Market Direction DJIA: The set up on the DJIA chart looks similar to that on the XJO with a potential double top coming into play. The MACD has crossed down throught eh signal line however the slow stochastic has crossed up so mixed signals there. Again for the rally to continue the market will need to make fresh 2011 highs above 12,400 points. The direction of the market will be effected heavily by reporting season this week. Nine out of the thirty Dow components report this week and they account for just over 40% of the overall index weighting so earnings results are likely to be the major driver of volatility. If the market does start to fall then a test of 12,000 points is likely which is the bottom trend line in the current trading channel.



Economic Data:
A relatively quiet week of economic data coming up with the main news being the retail sales data out of the UK and a key manufacturing index out of the United States.

AUD Monetary Policy Meeting Minutes - Tuesday 11:30am
USD Building Permits - Tuesday 10:30pm
GBP MPC Meeting Minutes - Wednesday 6:30pm
USD Existing Home - Thursday 12:00am
AUD PPI q/q - Thursday 11:30am
EUR German Ifo Business Climate - Thursday 6:00pm
GBP Public Sector Net Borrowing - Thursday 6:30pm
GBP Retail Sales m/m - Thursday 6:30pm
USD Unemployment Claims - Thursday 10:30pm
USD Philly Fed Manufacturing Index - Friday 12:00am


Company Reporting Season:
Earnings season gets into full swing this week as many majors report in the US and globally. Nearly a third of DOW component companies report this week including Intel, IBM, Johnson & Johnson, American Express, United Technologies Corp, Du Pont, General Electric, McDonalds Corp, Travelers and Verizon. Other significant companies reporting include Goldman Sachs, Apple, Yahoo, Wells Fargo, Morgan Stanley, Newmont Mining, Nokia, Phillip Morris and Xerox. Two major airlines, United Continental and Southwest are also reporting.

Monday: Citigroup Inc., Texas Instruments Inc.
Tuesday: Cannon Electronics Inc., Goldman Sacs Group Inc., Hankook Tire Company Ltd, Harley Davidson Inc., Intel Corp, IBM Corp, Johnson & Johnson, Novartis AG, Tesco PLC, Yahoo Inc
Wednesday: American Express, Apple Inc., AT&T Inc., Blackmores Ltd, Reckitt Benckiser Group PLC, United Technologies Corp, Wells Fargo & Co,
Thursday: E I Du Pont De Nemours And Co, General Electric Company, Honeywell International Inc., McDonalds Corp, Morgan Stanley, Newmont Mining Corp, Nokia, Phillip Morris International Inc., Southwest Airlines Co, Travelers Companies Inc., United Continental Holdings Inc, Verizon Communications Inc., Xerox Corp.
Friday: None


Stocks To Watch



Altura Mining Limited: AJM/AJMOA The underlying value of AJM has still not yet been recognized by the markets however with news due on several fronts that could be about to change. As mentioned in a previous weekly update, the company has a suite of impressive projects including 30% of the Mt Webber Iron Ore project which I have valued at $200m on a DCF basis. Altura's JV partner, Atlas Iron Limited, has been managing a drilling program since early March with the objective of upgrading the JORC category of the current DSO resources with a large proportion expected to be converted to indicated and measured status. Diamond drilling is also being undertaken for metallurgical studies, bulk density measurements and geotechnical data. Results are due early in the current quarter. I have calculated the value of the Mt Webber project at $0.44 per AJM share (fully diluted) based on DCF modeling at a discount rate of 10%.

The MD has again been up in Indonesia recently most likely trying to get final permitting approvals for the development of the company's Tabalong Coal Project in Indonesia (DCF valuation of $37m or $0.08 per share). It is also a known fact that AJM is keen to secure new coal projects in Indonesia which is another possible reason for his visit.

The company's drilling business continues to generates free cash at a rate of greater than US$2m per year. Cash reserves are likely to be in the vicinity of $12.8m at the end of March 2011 which excludes the exercise of AJMOA options that could bring in another $19.5m by September. These funds could be used to fund a portion of the company's share of development costs at Mt Webber assuming Atlas don't attempt to buy out the entire project by offering an up front payment to Altura. News Due: Receipt of final permits giving the company the go ahead to develop the Tabalong Coal Project in Indonesia. News on the acquisition of new coal projects in Indonesia and the Philippines. Drilling results from the Mt Webber DSO project. Further drilling results from the Pilgangoora Lithium Project where drilling is underway. Updated development schedule for the Mt Webber DSO project which currently has a start up target of 2012. Price Target: A break above 15.5 cents should lead to a move back to the 16.5-18.5 cent range where there is a fair amount of resistance on the chart. Once 18.5 cents is broken I expect a swift move back into the 20's. Disclosure: Holding AJM



C @ Limited: CEO: CEO is back on the weekly picks this week however there is little to add to my previous comments other than technically the stock is looking very strong. Perhaps we are finally about to hear news on coal acquisitions in Mongolia or Indonesia or both. As stated on the 28th of March when the stock last featured, the team representing the company has been evaluating projects for months so hopefully progress has been made and quality projects are about to be secured. News Due: Details about the acquisition of coal projects in Mongolia and Indonesia. Price Target: The price has been trending up very nicely since the second week of March. It is currently up against the upper trend line in a channel. From here the price will either break out of the channel or will head back to test the lower boundary of the channel. Without news I would probably favour the latter and have no holding at present based on this expectation but any retrace is likely to be short lived given the momentum which the stock currently has. I will be buying back in if the stock moves towards the lower channel line early this week or if there is a convincing break of the upper line on volume. Disclosure: No Stock Held



Chesser Resources: CHZ Further drilling results from the 100% owned Kestanelik Gold Project in Turkey are due. The 4th phase drilling program with multiple RC rigs (30,000m planned drilling) is scheduled to commence in May. Results to date indicate a large high grade system at Kestanelik with the potential to host a significant million plus ounce resource. Drilling has delivered many high grade hits including recent results of 10.5m @ 8.3g/t Au and 11.5m @ 13.5g/t Au including 9.6m @ 16g/t Au. More than 80% of the high grade vein targets remain untested so the potential to grow the resource is very high. Drilling on a second project at Karaayi (about 60km Southwest of Kestanelik) is about to commence with a 2,000m program scheduled to start in late April. The new Project has the potential for bulk tonnage lower grade ore and is located 10km from the 1.3m ounce Kirazli project. News Due: Further drilling results from the 10,000m drilling campaign at the Kestanelik gold project which is due to be completed by the end of the quarter. Commencement of the next exploration program comprising 30,000m of RC and diamond drilling. Initial JORC resource estimate for Kestanelik. Price Target: Chesser is still above the downtrend line but has so far failed to move significantly higher, trading in a tight range between 76 and 80 cents. A break of 80 cents would give a target of 84.5 cents. There is further resistance at 87.5 and 90 cents but once 90 cents gets broken the gap between $1.07 and $1.08 looks good to be filled. Disclosure: Holding CHZ



Empire Oil & Gas NL: EGO The Empire chart still looks like it is setting up relatively nicely so it remains on my weekly watch list. The share price has been impacted by the exercising of options and sale of shares by its directors. During the time since the 3Y was announced the shares have fallen by a quarter from around 4 cents to the low 3's. The 2D seismic survey being flown over the Perth Basin which started on April the 1st could lead to the generation of some more attractive drilling targets for the company. I also expect more details to be released soon on the development plans for the Ginginwest-1 and Red Gully-1 discoveries. News Due: Results from the Garibaldi seismic survey over the Perth Basin. Further details of development plans for the Perth Basin field including the GinginWest-1 and Red Gully-1 wells. Price Target: I will be watching for a price breakout above 3.3 cents on significant volume as a sign to enter the market. The first targets are at resistance levels of 3.5 and 3.7 cents. Disclosure: No Stock Held



Gulf Industrials Limited: GLF/GLFOB Friday's announcement that the company had increased the size of its mining leases in Uganda to 19.5 sqkm was significant on several fronts. Firstly, it should enable the company to become a significant producer (in global terms) of high quality vermiculite. Secondly, with a JORC inferred resource of 55mt Namekara is one of the world's largest vermiculite resources meaning the company can progress negotiations for long term offtake contracts which can be used as the basis to support a much larger mining operation. Friday's announcement also alluded to the potential for other minerals associated with vermiculite such as phosphate and copper. The other factor about the announcement that impressed me was that the directors are due to be issued options with an exercise price based at 140% of the volume weighted average price of the 5 days leading up to tomorrow's meeting. The fact that they have issued this announcement has effectively increased the exercise price of their options. News Due: Further details of plans to increase production of Vermiculite to 30Ktpa. Development plans for the Limestone Project in Madagascar including feasibility study, which is due to be conducted in the first quarter. Commencement of 8,000m diamond drilling program at the company's Namekara Project in Uganda. Price Target: The stock broke out of a wedge formation on Friday. The first target is 6.6 cents however a break of that level on volume is likely to see the gap between 7.5 and 7.8 closed. The potential upside here remains in line with my previous estimates and is clearer on the weekly which shows little resistance between recent highs and the high teens. Disclosure: Holding GLF/GLFOB


The weekly shows the longer term upside potential for this stock.



Metaliko Resources Limited: MKO The initial JORC resource announcement was delayed by a few weeks due to the availability of a consultant however an announcement must now be close. Given the small market capitalisation of this stock I expect that a decent sized initial resource announcement will have a substantial impact on the market capitalisation of MKO (currently $18.6m fully diluted). The timing for the resource estimate for the Anthill and Goongarrie Gold Projects now expected before the end of April. As posted previously based on the grades and widths of drilling results announced to date I expect the resource to be significant for a company of MKO's size. News Due: Initial resource calculations for the Anthill and Goongarrie mineralization. Interpretation of the 11,000 line kilometres of high resolution aeromagnetic surveys conducted in February. Details of further drilling programs at the company's gold projects. Price Target: There is resistance at 24.5 cents and to a lesser extent at 25 cents. A clear break of 25 cent son volume gives a target of 35.5 cents. Disclosure: Holding MKO



Muting Gold Limited: MYG/MYGO/MYGOA If you can spare 15 minutes today, I would suggest you take a look at the following presentation given by the MD of Mutiny Gold, John Greeve, at the Australian Resources Conference USA. Pay particular attention to the flyover:

http://live.arcusa-newyork.com/04-JohnGreeve.html

I think this video is outstanding and highlights the potential of Muting Gold's Deflector deposit which is yet to be recognized by the market. The potential for a multi million ounce deposit is real and the grades are very good. New York equity research firm RB Milestone, who backed MHM late last year, have also researched this company and they appear to have recognized that a great investment opportunity exists. MYG has a plant that, with a $50m investment, can be bought into production in quick time. This is currently planned for 2012. Banks have already indicated that they are interested in lending the company a substantial portion of the $50m required for startup ($30m based on current resources). Recent drilling has already increased the strike length of mineralization at the Deflector deposit by 50%, indicating the potential to grow the resource from the current 590,000 Oz of gold and 25,500 tonnes of copper. If the next round of drilling is followed by resource upgrade then the banks may be willing to increase the lending ratio to even higher levels, meaning less dilution for existing shareholders. The target for Deflector is 1.65-2.50m oz of gold and 40-80K tonnes of copper, which is a sizeable resource by any standard. This is certainly a stock worth watching during the coming months, particularly if the gold price keeps heading north. News Due: Further details of drilling program planned for Q2 (April) at Deflector. Following this program there will be a re-estimation of the open pit resource at Deflector. Price Target: There is resistance between 15.5 and 17 cents but one this is broken then 20 cents should be achieved in quick time. Beyond this level the target is 27.5 cents based on a measured move off the weekly chart. Disclosure: I have now upgraded Muting Gold to a strategic hold in my portfolio from this week meaning I will hold a large position plus trading stock. My preferred entry here is through the options due to the increased leverage and the low time value currently being attributed based on the 5 cent exercise price.


And the weekly giving a target of 27.5 cents:



Silver Mines Limited: SVL/SVLO With silver charging ahead on Friday night perhaps this will be the week when SVL can push through 40 cents convincingly. Silver closed at $43.00 an ounce and for the week was up 5.2%. The exercising of options may be one reason why the price of SVL has failed to move up strongly during the latest move on silver. Drilling is scheduled to commence shortly with an 8,500m drilling campaign which will hopefully grom the resource at Webbs towards the exploration target range of 26-57m ounces of contained silver plus copper, lead and zinc credits. Final results from the diamond drilling program from late last year must also be close. All holes to date have intersected visible mineralization therefore I expect some good results from these holes. News Due: Results from diamond drilling at the Webb's Silver Project, most of which are scissor holes which will primarily be used to confirm existing mineralization thereby increasing the confidence in the existing resource and to provide samples for metallurgical test work. The commencement of the 2011 drilling program, which will involve 12,000m in RC holes, 8,000m of which will be centred on the Webbs project. Results from the scoping study into the development of a mine at the Webbs Silver Project. Price Target: The sow stochastic has now crossed up and the MACD is rising. The first target is to break through resistance at 39.5 cents. If this happens on high volume then the stock should head towards new all time highs with 50 cents a possible target. Disclosure: Holding SVL/SVLO



I'll be away for the next two weeks so the next report will be on the 9th of May.

Good Luck this week.