Canaco Resources – CAN.V a gold mining stock doing business in Tanzania is my latest portfolio addition. I could write about the fundamentals but this is not exactly my style. So with the exception of a few things I would rather consider common sense as opposed to an in-depth fundamental approach I will stick to what I am more familiar with. I’ll stick to the charts.
That said CAN.V – Canaco Resources has a 200km² land position and recently came out with decent drill results. The size of the property is huge and that’s what makes it a very high potential stock as what they own looks like an entire gold mining district. More drill results are about to be released soon.
The technicals are very bullish. I consider the chart’s message to be very clear. From a purely technical perspective there is not much more you could ask for. We witnessed a break-away gap accompanied by huge and above average volume. This is what I label a “shift in sentiment”. You could also call it a “game changing event”. It all comes down to the same. Something significant has changed and a new powerful trend has started. Market participants’ perception of the valuation the stock should carry has changed. That’s all I need to know. Whenever I identify such a situation I position myself accordingly and simply go with the flow.
If you go through my public list and follow what I do on a regular basis you will notice I do this day in, day out. I scan for above average volume and search the entire US and Canadian market universe to find the stuff where a shift in sentiment has occurred and where huge amounts of money start flowing into a stock. Then I do more DD and add a bit of common sense. In the end though I try to listen to the charts and I literally force myself to keep things simple. The charts tell the truth – no matter how smart you think you might be. I don’t argue with the charts. I listen to their message and act accordingly.
This is a game of odds. I have found an approach that suits my needs and that works for me. Does it mean every stock I pick will be another VEN.TO – Ventana Gold? You guessed it. Fat chance. The stocks I pick have great potential – but there is no way to tell which ones will work well and which are the ones that are not going to work. That’s why you need to cut losses as soon as a chart doesn’t behave the way it should. A good example was AOT.V – Ascot Resources. At some point in time it was clear the chart was not behaving well. Buying pressure was not kicking in. There was no follow through. There is no need to over-analyze these kind of situations. Trading is about making mistakes. Success depends on how you manage losing positions.
Up-to-date CAN.V – Canaco Resources Chart on my public list.
http://www.canaco.ca/s/Home.asp
The District
The Handeni Gold District consists of numerous gold discoveries in an area of eastern Tanzania, highlighted by the Magambazi prospect, which currently hosts an active artisanal gold mining operation. Recent gold discoveries in the Handeni region have occurred on a district scale and have defined an extent of mineralization with a strike length of over 100 km. Canaco Resources’ management believes these discoveries are evidence of a highly prospective emerging gold district in Tanzania and have been successful in establishing a large land position in the district.
The Property
The Handeni Gold Project consists of two contiguous claims totalling 200 km²: Magambazi 0.34 km² and Kilindi 199 km². The district is located adjacent to the town of Handeni. Local roads access workings on all four claims. Local mining related infrastructure is non-existent as a result of the recent emergence of the region’s mining potential based on discoveries made since 2003.
Have a great evening!
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