After going through headlines and press releases every day, you begin to see a trend forming over time, and one of the common themes these days is that gold miners and mineral companies tend to dominate the news within the small and micro cap realm. With that said, we decided to focus within this sector for our next pick, and after sifting through our scanners and watchlists, we finally landed on one company; American Creek Resources Ltd (OTCPK:ACKRF). Before we get into our trading strategy, first we think some background on the company is essential.
Background:
American Creek Resources Ltd is engaged in the exploration and development of mineral resource properties. The company holds interests in the properties located in the regions of British Columbia, Canada. Its projects include the Treaty Creek project, and Gold hill, Dunwell, Ample goldmax property and others.
ACKRF Trading Strategy:
With the recent breakout from the downtrending resistance and the support found this week, we like the entry at Thursday’s open. Up first, we always like to discuss potential resistance to get it out of the way. Each of the three key resistance levels are actually the peaks from prior months which are conveniently spread out in roughly 5 cent increments. The levels of resistance we think may play a role in this position in order from closest to furthest are the April peak at $0.25, the May peak at $0.30, and finally the March peak at $0.351. After this final level is crossed, we think that the stock might not make it too far over its 52-week high of $0.375, so we have set our price target there.
As far as support is concerned, there are two key levels which are thankfully very close to the current price. Up first we have the static support at $0.18 which just helped boost the price this week. Immediately following that is an older trough that served as strong support a few months back at $0.16. In order to give this stock some breathing room while also attempting to avoid ruin, we have decided that a proper stop loss would be at $0.148.
With these risk parameters in place and using Wednesday’s close of $0.1978 as the proxy entry price, this play is shaping up to have +89.59% upside while risking -25.18%. We anticipate this move occurring within the next six to eight months.
