Todays PicksBCC/BCCO: The stock didn’t perform quite as well as...

Todays Picks
BCC/BCCO: The stock didn’t perform quite as well as I expected yesterday however I still expect a strong performance this week with the expectation of news. I sold my options soon after open at 4.6 cents and then bought them back later in the day at 4.3 cents, so overall a good result. On the chart the price is currently at the top of the uptrend channel so we could see a retrace to around 7.5 cents before the next leg up. News Due: Spud date for Lee County well, confirmation of production ramp up at Pompano well to 6-7 mmcf/day.

MHM/MHMO: The signs are becoming clear that the overhang from the placement stock is subsiding. Buyers were clearly more impatient yesterday prepared to bid up the stock. There is a gap on the chart between 29 and 30 cents which may get filled before the fireworks start but I would strongly suggest that the time to enter at these prices is drawing to a close. At 17 cents the options are a little expensive relative to the shares at the moment. News Due: Completion of the acquisition of the Aluminium Salt Slag plant and progress on the establishment of a silica plant in Tasmania.

CCU: My target of 30 cents was hit yesterday and although the risk of a placement is still there, CCU still should deliver good returns even from these levels. However the indicators on the chart are now signaling that caution should be exercised. For this reason I think CCU is a hold because I believe there will be opportunities to reenter at cheaper prices in coming weeks. News Due: Further silver exploration drilling results should begin to flow in coming weeks.

ATI/ATIO: I expected a breakout from the pennant yesterday but it did not occur. A positive day is needed today to confirm the break with a revised target of 5.5 cents. The chart still looks fantastic with the slow stochastic about to cross up and the MACD rising, albeit slowly. News Due: Potential expansion of the Bao Loc project. New project acquisitions to be brought into the company at any time.

QHL: Nice consolidation happening here. I can see a flag pattern with a height of 28 cents. If a breakout upwards occurs that gives a target of about 80 cents. News Due: There is potential for news on more supply contracts at any time.

ADN: Today is the day share purchase plan stock is due to hit peoples accounts. But I would suggest, like with MHM, any period of weakness here should be used to accumulate stock. ADN is a strong buy due to their upcoming Rover 1 assay announcement in December. News Due: Assay results due in 3-4 weeks from the diamond drill hole at Rover 1 next to Westgold resources discovery.

MEU: The trading halt should be lifted by the release of news this morning and I expect it to be positive. If the price rises significantly I will sell a few and replace them with SPP stock at 14 cents. News Due: Exploration results from Junction Dam (Close to the Honeymoon uranium mine).

ARM: Another good performance by ARM yesterday with the price reaching a fresh high of 48.5 cents. The MACD crossed upwards, so to did the slow stochastic and the RSI continued to rise. I expect 50 cents to fall this week before an assault on the all time highs in the sixties. News Due: More sampling results from the company’s manganese project. Presentations to US, Canadian and European investors taking place over the next three weeks could demand to an already tightly held stock (top 20 63% held).

UEQ: I was very impressed with UEQ’s announcement yesterday regarding Mitsui paying $2m for an option to invest a minimum of $15m in the Nabarlek (potential 25% interest) and West Arnhem Land project (Potential 9% interest). The chart is signaling a return to prices around 25 cents is highly likely in the near term. The RSI is rising through 50, the slow stochastic has crossed up from the oversold level and the MACD signal line looks set to cross upwards. In my opinion you can’t ask for a better setup on the chart. I bought between 18.5 and 20 cents. Cameco has recently committed to invest up to US$16.5m in the PhosEnergy for 63% interest. UEQ has 210m shares on issue and had $8.4m in cash at the end of the September quarter. This is fundamentally cheap as well as a standout buy on the charts.

Good luck today everyone.