Hi all, after what seems like an eternity of our recent downtrend, Nova is finally showing strength on the chart. We have seen a breakout of the downtrend, albeit not yet on significant volume, and it would appear there is an appetite for NVA again in the market. Recent announcements have been extremely positive, including;
- The confirmation of RPM's potential as a major discovery,
- The confirmation of Management's focus on improving Korbel to the Indicated status (imo this will be the biggest SP driver), and
- The drilling results (with more to come) which have shown some excellent intercepts.
We are of course waiting for further information on the Snow Lake IPO (massive upside potential for NVA), and also the Scoping Study. I've seen some comments recently that Nova is 'dead in the water' and that 'news has dried up'. I would strongly oppose these views, I think we're about to be smashed with news from this company, and the SP is certainly indicating the market has the same expectation. Now, on the chart;
We recently saw strong bullish divergence on the RSI at our 10.5c - 11.5c range, which occurs when the price is trending down, but the RSI (the 'strength' indicator) shows that the bears (sellers) are losing control. In my experience, this occurs when the SP is at the bottom of the downtrend, before it turns. If you took the opportunity to add to your holdings at this level, well done.
Now, you can see that the SP has broken out of the downtrend from 23.5c to 10.5c, and closed at 15c on Friday. From this point, I see two targets in the medium term.
- The first is the recent high of 23.5c, which is around 57% upside from yesterday's close. We will likely see strong resistance around this level, due to the holders who bought into the high and also the CR looking to offload at breakeven. But, on strong news momentum, I think it is very likely we could see this by EOY (on the basis of deadlines being met by NVA).
- The second is the 1.618 Fib Retracement level, which sees us move to 32c (110% upside). Again, if we do see the news we are hoping for this year/ within the next 12 months, I think this is a realistic target. Once (if) we breakthrough the recent high, we will very quickly see the sentiment swing on our SP, and blue sky targets from there.
Now, it is usual for the Share Price to retest the break of trend, so we may see some churn over the next week or so (without news) around the 13.5c - 14.5c mark, particularly as the RSI is a touch overbought at the moment. In my opinion this is nothing of concern, and will present as a buying opportunity for me. Well done for everyone who managed to hold on in recent times, I think we are about to see our thesis come to fruition.
Cheers.
(20min delay)
