Source: Clive Maund 05/02/2024
Technical Analyst Clive Maund analyzes Perpetua Resources Corp. to support his view that the stock is a Buy.
Perpetua Resources Corp. PPTA is currently displaying strong upside momentum, with potential for substantial gains in the short to medium-term. This positive momentum is evident on the 6-month chart, indicating a promising outlook for investors.
The Fundamentals Driving Momentum
Perpetua Resources Corp.’s recent surge in stock value is linked to the news of securing up to US$1.8 billion in financing from the export-import bank of the United States for the Stibnite Gold Project. Notably, the inclusion of antimony production—which is crucial for munitions and not domestically produced in the U.S.—has been a key factor in attracting this substantial financing.
Chart Analysis
The stock price reacted positively to this funding announcement, leading to a significant surge. Subsequently, the formation of a bull Pennant pattern suggests a potential for further gains. The decreasing volume during the Pennant formation indicates a genuine buildup, reinforcing the likelihood of a continued upward trajectory.
The 5-year chart unveils key resistance levels influencing short-term movements, with a target set around the US$9 mark. Moreover, the long-term 16-year chart hints at a large base pattern forming since 2013, signaling a possible breakthrough above US$9 – US$10 resistance levels and a substantial upward potential, especially amidst favorable gold market conditions.
Investment Recommendation
Perpetua Resources is deemed a Buy across various timelines, presenting an appealing opportunity for rapid gains. Setting a stop loss below the Pennant boundary can mitigate risks in case of unexpected downturns.
While unlikely, any adverse scenario involving a withdrawal of the promised financing could impact the stock negatively. Nevertheless, such a situation seems improbable given the current circumstances.
Perpetua Resources Corp. closed at US$5.46, CA$7.54 on April 30, 2024
Important Disclosures:
- Perpetua Resources Corp. is a sponsor of Streetwise Reports.
- Clive Maund selected companies for inclusion based on personal research.
- Opinions expressed are solely of the author. Streetwise Reports does not provide investment advice.
- This article does not constitute investment advice. Readers are advised to consult with financial advisors.
Clivemaund.com Disclosures
Mr. Maund’s opinions are based on available data and do not serve as financial advice. Investors should conduct their own research and seek professional guidance.
