daytrades march 22 pre-market, page-3

This Weeks Picks

Market Direction: Wall street closed lower for the first time in eight sessions on Friday, ending the longest winning streak since August 2009. The question on investors minds today will be is this likely to be the start of a long overdue correction? The major economic data coming out this week includes existing home sales on Tuesday at 1:00am (AEST), core durable goods orders on Wednesday at 11:30pm, new home sales on Thursday at 1:00am, weekly unemployment claims on Thursday at 11:30pm and Ben Bernankes testimony on the unwinding of the Federal Reserves emergency liquidity programs and implications for economic recovery at 1:00am on Friday morning. His testimony is likely to spark some volatility in the markets, especially during the second part of the testimony, which involves questions without notice. Responses can spark volatility in the markets.

Sectors of Interest: With gold and base metals down sharply on Friday night due to a strengthening US dollar, stocks in these sectors are unlikely to attract much interest today. If a long overdue pull back occurs attention is likely to turn to non cyclical stocks and other areas in the market where risk is perceived to be lower.

MHM/MHMO: The long awaited update about the potential development of a silica plant involving Wacker AG of Germany came out last week. The update provided investors with an indirect answer to the project status which was that the German company is yet to make a firm commitment to the project. The response by MHM has been to pursue discussions with three other parties, one of which is looking into the viability of establishing a silicon smelter in Tasmania. Technically the stock has a firm base which has formed at 30 cents and indicators could give buy signals should prices rise early this week. If support at 30 cents fails then the downside looks to be 25 cents. News Due: Plans for exploration on gold and base metal projects located in Tasmania. Update on performance of the Aluminium Salt Slag plant and progress of the upgrade. Disclosure: Holding MHMO

SSN/SSNO: The cup and handle pattern which had developed over the past seven months failed to eventuate however another one which has developed over the past five weeks could play out this week. The right hand side of the handle is now forming and the breakout point is a close at or above 3.6 cents. The target price post breakout is 4.5 to 4.7 cents. With the news flow due to pick up this week I will be watching SSN closely for trading opportunities this week and if a decisive breakout occurs I will buy more. News Due: Commencement of fracturing operations at the Gene#1-22H well due on the 29th March. Spud of Ripsaw well due on the 23rd or 24th of March. Details of the upcoming drilling program at Bakken. Disclosure: Holding SSNO

PEN: There are currently four drilling rigs currently working at Ross and a JORC resource statement for the Ross and Barber projects is due in June this year. Because of this I believe interest in PEN is about increase with a break out to the upside looking increasingly likely. Technically the stock looks excellent with a bullish marubozu candle forming on Friday showing that the buyers were in control. Hopefully there is further confirmation from the buyers during today's trading. The indicators on the daily chart are giving off bullish signals with the slow stochastic having crossed, the RSI about to rise through 50 and the MACD looking set to cross as early as today. News Due: JORC resource for the Ross and Barber projects, Further drilling results from Ross. Disclosure: Holding PENOA

ARM: With drilling scheduled to commence within the next few weeks I expect the level of interest in ARM to increase from this week. Hopefully the company will provide the market with some more details of the upcoming drilling program, which should attract new buyers into the stock. Technically the stock has just complete a head and shoulders pattern which could see prices head towards 80 cents. If it gets there I will be buying back the stock I sold at $1.20-$1.25. Should prices move back over $1.05 then this will signal a failure of the head an shoulders pattern and be a signal for me to buy some trading stock. News Due: Approval of drilling work program for the upcoming exploration on the Capricorn South East manganese project. Disclosure: Holding ARM

OVR: The volume traded in OVR has been steadily increasing in recent weeks and buyers have become increasingly willing to soak up the stock in the 7-8 cent range. Given the calibre of the Andrews Zinc project and the fact that a placement was recently conducted at 8.5 cents there should be limited downside by entering at current prices. As details are released about the upcoming exploration program for the 2010 season and the upcoming feasibility study, I expect OVR to break out from the current level and head towards the 15-20 cent level. Macquarie Bank, Glencore and Officium Capital all decided to participate in the recent capital raising which raised my level of confidence in where the price is headed. News Due: Exploration plans for the 2010 season. Disclosure: Holding OVR

VLA: News that the process for American investors to buy shares in the company will be simplified with the upgrading of the American Depository receipts from the grey market to pink sheets generated a substantial level of interest in the stock on Friday. The chart looks quite bullish with the slow stochastic and RSI rising and the MACD having crossed up in the middle of last week. Some caution is needed when trading VLA because on a regular basis the convertible note holder converts notes into shares and has sells into the market (this is known because there they do not lodge substantial shareholder notices meaning they must be selling stock into the market). News Due: Progress of Phase I Cavatak trials against various forms of cancer including breast, prostate, melanoma and head and neck solid tumours. Progress of phase II IND application for Cavatak in the US. Disclosure: No Stock Held

BCN: With the gold price down sharply on Friday night I expect BCN to pull back today with a strong chance that the gap between 3.1 and 3.2 cents created on Friday will be closed. Because of the gap I decided to close out my position on Friday afternoon in the hope that I will be able to buy back BCNOA at 1.9 cents again early this week. Provided the gold price doesn't fall through the support level at US$1,100oz I believe speculative money will be attracted to the stock in the lead up to drilling results from Barlee. This should lead to some trading opportunities in coming days. News Due: Drilling results from the Barlee gold project. Disclosure: No Stock Held


Im back full time this week and looking forward to identifying more trading opportunities. Best of luck to everybody on the DT thread.