VLA/VLAO: There were few stocks that avoided the carnage yesterday but VLA was one of them. Looking at the chart a short term base around 5.5 appears to be forming. The indicators still don't look fantastic but the stochastic has crossed up. Given the US markets recovered their losses late Friday I expect VLA will have a positive day today. News Due: Update on IND application status with the US FDA. Further details of program for phase II trials. Results from other Phase I trials on different cancers.
GGP/GGPO/VIL: Both VIL and GGP held up extremely well, a sign that people have confidence in the Fausse Point testing which was scheduled to commence over the weekend. I expect an announcement confirming this as early as this morning. Given the likelihood of success I expect plenty of interest in both stocks this week with plenty of trading opportunities. I'll be holding some stock through to results because I consider the upside is very significant. The biggest risk here is probably something going wrong and damaging the well during testing but the gas and oil certainly appears to be down there. News Due: Results from testing of the Fausse Point well.
MHM/MHMO: The stock held very well and the chart continues to look positive. There is a base around 25 cents which should provide strong support should it be tested. The stochastic is still rising however the RSI has flat-lined at 50. One decent days trading and the MACD will cross up. IT will be worth watching MHM closely this week because there is likely to be an update on the proposed Silica plant some time next week and people may take positions in advance of this, creating additional demand for the shares. News Due: An update on the Silica project (Wacker AG) is also due. Plans for exploration on gold and base metal projects in Tasmania.
QHL: The time has come to watch QHL again. An update is due which may see the progression of the $700 million MOU for the joint strike fighter to firmer orders for their products. The company recently placed shares at 52 cents and followed this with a SPP which was two times oversubscribed, indicating strong demand exists for the stock. The stock has been badly hit by the recent downturn in the markets, however that will quickly change if the MOU translates into firmer orders. The chart put in a nice reversal candle on Friday with the stock being bought aggressively from the lows at 38.5 cents resulting in a close whish was higher than the open, at 43.5 cents. I also note positive divergence exists on the stochastic (stochastic showing an uptrend whilst the price has been falling). There is a gap down to 38 cents which looks like it will close before a move up commences. The biggest question mark in my mind is how the US government will afford the new plane and therefore whether any supply contracts of value will materialise (print another few trillion perhaps?). But that doesn't change the likelihood that the stock will move in anticipation of news over coming weeks. News Due: An update on the MOU with Lockhead Martin and Northrup Grunmann in relation to up to $700m in supply contracts (doors and access panels) for the joint strike fighter.
