I dont really trust TA on a stock as (Currently) illiquid as HVY right now. BUT if you do....I couldn't help but notice what a beautiful cup and handle pattern HVY SP chart has created over the last six months. (See chart attached below)
A perfect Cup and handle is probably the most bullish TA chart pattern there is. In HVY case, below, the cup base is 20 cents and the neckline now is 33.5 cents. (of both the cup and handle) - This means it's a 13.5-cent size cup . Traditionally cup and handle pattern lead into a strong rally if the price breaks above the neckline at least equivelent to at least the cup's depth or double it.. Therefore a breakout over 33.5 cents should lead to a strong new rally of at least 13.5 cents more which should take us to around or at least 46 cents (or double that being .. 46+13.5 again = 59.5 cents) before its next big consolidation.
its also uncanny how often TA charts tie in with potential fundamentals. We HVY holders are now expecting 2 big announcements in the very near future that could/should hopefully cause exactly such a strong short-term potential rally in HVY's share price. These expected announcements soon are:
1) The much vaunted PFS release, which should hopefully have the independent engineers and competent persons reconfirm HVY's current NPV at close to or over A$300 million - as opoosed to its weaker current SS NPV of A$250 million.
An A$300 million NPV now with only 68 mill shares on issue would indicate a Net Present Value today for HVY of approx
A$4.30 per share.This should give the stock a significant uplift. .........On average (normally) by PFS stage, most developing ASX junior miners with decent management and strong assets in Oz - (not in some dodgy far-off country) - should move up to trade at around 20-30% of their PFS NPV.
This would therefore indicate a fundamental target of 85-1.35 cents. So 46-60 cents as indicated by the TA cup and handle chart suddenly seems a very achievable, reasonable and even cheap target.
2) the other announcement we holders hopefully expect soonish should be something positive about the "new deal" HVY has announced a few times that its working on. My guess is this will either be another alluvial garnet sand resource or a hardrock one - or whatever it is either way IMO management (aaron and Adam ETC) know this garnet sand market well and how to develop mines and would most likely not be putting the time and effort into a new deal if it isn't sexy and with with the potential to add significant upside to the shareprice,
So yet again a jump to 46-60c after either announcements 1) or 2) above, or both - could/should see this cup and handle pattern play out to its usual outcome (which is historically an 80% + likelihood) very easily. Naver ignore such a good cup and handle set up!
But....As i say Im just not sure if TA on illiquid junior ASX stocks really do apply - but as a large shareholder, Knowing that cup and handle formations have an 80%+ chance of comming to fruition ( ie followed by a strong 100% of cup depth at least rally) itll be fun watching the HVY chart pattern over the next few weeks to see if that comes to pass or not - So Watch this space. - or preferably grab a few while you still can down here ...and watch this space.
GLTH!
(20min delay)