Technicals & Fundamentals Could Be Setting Up A Rally For This Small Explorer
Tuesday, May 18, 2021
There are many important rules in technical analysis, but some that are certainly trumpeted more than others. One is, “once resistance is broken, it becomes support.” The other is the dictum, “buy on support.” As it happens, gold just broken through one important resistance level and is staring at another as it looks to reverse a nine-month downtrend. In the same lane,
Graycliff Exploration Limited (CSE:GRAY) has in the midst of demonstrating the first rule, which may have investors contemplating the second. (OTCQB:GRYCF)
Up until last week, Graycliff was focused exclusively on its 945-hectare Shakespeare Project west of Sundbury, Ontario in the prolific Canadian Shield. The project is underscored by the historic Shakespeare Gold Mine that produced from 1903-1907. The Canadian Shield, also called the Laurentian Plateau, has produced dozens of high-grade mines containing gold, silver, nickel, copper and other metals, with those around Sudbury recognized as some of the biggest and most well-known.
Sudbury’s wealth of minerals can be attributed in part to a giant meteorite hitting the Nuna supercontinent some 1.85 billion years ago, leaving the second biggest crater on Earth (~81 miles wide) that ancient volcanos later filled with magma hosting a bevy of metals. Keep Fast-forwarding to the formation of North America as plates pulled Nuna apart and that area is now the Sudbury Basin that generates billions of dollars in mining revenue every year.
Last week, Graycliff became fundamentally stronger with the addition of the Baldwin Project adjacent to its Shakespeare property. Baldwin spans about 1,500 hectares, bringing the company’s land package in the shield to more than 2,500 hectares.
Baldwin, located east of Shakespeare’s boundaries, has historically been explored for the known uranium and nickel occurrences in the area, but has gone overlooked for its gold potential, according to Graycliff President and CEO James Macintosh. “[T]here are striking similarities to the Shakespeare geology and structure including indications of intense deformation and faulting,” said Macintosh, adding that Baldwin is a “blue sky upside.”
A look at the technical chart for gold shows it has some upside to it also since breaking over resistance at $1,800 per ounce on May 6. That was a key psychological level and kept a pattern going of higher highs since bottoming in March at $1,673. For the first time since February, gold is challenging moving back over its 200-day moving average, a bullish signal for the future if it does.
Graycliff, which has only been trading on the CSE since August, had a huge run in March/April that took shares from 45 cents each to as high as $2.86. The stock has now returned to near where it started, looking to hold support at $0.52.
Should GRAY slip a little lower, there is another solid support around 46 cents where the last run began.
The technical upside points to an initial resistance at 63 cents for GRAY with more at $0.72, 33% higher than the current level ($0.54) during Monday morning trading. Beyond that, GRAY will be looking to retake its 50-day moving average (at $0.77) and a resistance at 82 cents.
With the recent property acquisition and assay results expected in the coming weeks from a drill program at Shakespeare, GRAY just may get the catalyst to spark another run in shares similar to two months ago.
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