Time to Take Profits in Continental Gold?
This morning Continental Gold (CNL.TO) released its much anticipated updated resource estimate which greatly increased the size and marginally increased the grade of its flagship Buriticá Project. This news is very significant because it makes the economics of the project significantly more attractive, despite the current weak gold price environment. CNL shares are soaring once again on the back of this morning’s news:
While the news is unmistakably positive from a fundamental standpoint. From a trading standpoint the pro move is to take profits in front of resistance near the C$3 level after 8 consecutive up days and some fairly clear front running Monday and Tuesday of this week.
Fairly thick layer of support/resistance just above current levels in CNL
Two weeks ago we highlighted a ‘sweet spot’ buying opportunity in CNL using some technical confluence around the C$ 2.40 level, now we are moving to a neutral trading position after a ~25% rally in the last two weeks. Long term investors can ignore this post, however, in the near term at C$2.90/share the risk/reward is relatively balanced.
If CNL does indeed decisively break-out above resistance it will be the strongest indication yet that Buriticá is very much for real and that Continental has a unique world class deposit on its hands.