Canadian Nickel Developer Breaking Out
The stock showed up on my radar in the middle of the week continued to follow through on ten times average weekly volume.
In the last couple weeks, I have noticed alot of copper and nickel stocks have been breaking out of bases and making new one month highs, Giga Metals is one that continued to look better and better throughout the week. They are developing a massive Nickel mine in Northern British Colombia, they are aiming to complete a PFS in Q2 2023, they announced a joint venture on the project with Mitsubishi in August. In which they gave up 15% of the project for 8 million dollars. Mitsubishi is valuing the company differently the market right now as Giga currently has a market cap of only $33 million Canadian, but it looks like the market is waking up to the deep value here.
This is going to a be a massive Nickel mine, which will have a mine life well over 30 years when completed, there is alot of room for expansion on the property as well. The company completed a PEA in 2020, at $10 per-pound Nickel the company has a post-tax NPV of US$421M, Nickel is currently trading above this level. And with the supply/demand outlook, you can see how this price could be much higher. The company has huge leverage to the price of nickel as illustrated below.
Okay so let’s take a look at the chart, which is why I became interested in this stock.
Sector Health - These type of stocks have been making nice moves over the last couple of weeks. Mining/ Non Ferrous Metals are top performing sectors in the entire stock market, so there is a potential tailwind behind you on this one.
Relative Strength - The stock broke out against the $SPX this week which is actually the kind of behaviour we want to see, let’s see if that trend can continue.
Volume - This week had over ten times average weekly volume on it’s breakout, powerful buyers are coming into this name. This is one of the most important things in a winning stock.
Resistance - It’s possible that there could some chop in the medium term if the stock continues to rise, it has cleared its most recent range which is a positive. Once above .60 cents it’s pretty much clear skies ahead.
Moving averages - Both have flattened out and are just starting to turn up, indicating that the turn may be in here.
Disclaimer
The views and opinions expressed on this website are for educational and informational purposes only, and should not be considered as investment advice. The author may hold positions in stocks mentioned on this website. The author of this website is not a licensed stockbroker or financial advisor. Nothing contained herein should be construed as a recommendation to buy, hold or sell any securities or financial products. Always seek the advice of a financial advisor and do your own independent research prior to making any trade or investment decisions.
We do not guarantee the accuracy or completeness of any information on this website. Such information is provided “as is” without warranty or condition of any kind, either express or implied. Past performance may not be indicative of future results. This website could include inaccuracies or typographical errors.
We are not liable or responsible for any damages incurred whatsoever from actions taken from information provided on this website, including financial losses. Since all readers who access any information on this website are doing so voluntarily, and of their own accord, any outcome of such access is understood to be their sole responsibility. In no event shall we be liable to any person for any decision made or action taken in reliance upon the information provided herein.