There is no sense in keeping it a secret these days; the mining industry is absolutely dominating the headline space right now. Everywhere you turn, you’ll find something about a junior miner in the news. Even if a specific company hasn’t been mentioned in said press releases, this increased media presence has began creating buying pressure by those who want to gain exposure to the sector. We believe that we have found one of those outlying companies that, while not being specifically mentioned in the headlines as often as others, the sentiment has certainly turned bullish over the last few months. Due to the outright technical setup of this stock, we’re excited to announce our newest pick; Arianne Phosphate Inc. (OTCPK:DRRSF) (TSX-Venture:DAN).
Background:
Arianne Phosphate Inc. is a Canadian company founded in 1997. The company was listed on the TSX Venture exchange in 2003 following a reverse takeover of Bruneau Minerals Inc. The company is engaged in the development of its Lac a Paul phosphate property located in Quebec, Canada.
DRRSF Trading Strategy:
This stock has been on a tear ever since breaking out of the intermediate downtrending resistance (shown in blue). Due to the strong performance on Thursday as shares closed up at $0.3586/share (+6.85%), in order to not miss out on any continued momentum, we like the entry at Friday’s open.
As far as support is concerned for this micro cap, it follows a very similar pattern we’ve noticed during this week’s picks in the fact that its first support level is a combination of the major SMAs. The 50-day, 100-day and 200-day SMAs all combine together to form a support zone between $0.29 - $0.30. After this important level, the only other near term support is the September low at $0.231. Anything below this should be seen as a potential intermediate trend reversal, so we have set our stop loss at $0.229/share.
For resistance, there are actually only two main points we felt were noteworthy between current levels and our price target. Up first we have the April high of $0.439 that served as significant resistance earlier this year. After that, we have the 52-week high of $0.4985. We believe that the current momentum will carry the price through these two levels and into territory not seen since 2018. With that said, we have decided to set our price target at $0.65/share.
With these risk parameters in place and using Thursday’s close of $0.3586 as the proxy entry price, this play is shaping up to have +81.26% upside while risking -36.14%. We anticipate this move occurring within the next six to eight months.
