GMO General Moly (AMEX) – Molybdenum Stock With Bullish Price Action

by Olivier on May 3, 2010

Another quick post as I know quite a few hold GMO – General Moly in their portfolios. Today’s price action is bullish. The stock has finally closed above the significant 4.00US$ resistance line. I recently stated in my chart annotations I was starting to seriously dislike the chart’s personality. In hindsight it now sure looks like it was the stock’s way to shake out weak hands. We almost tested the 4.00 $ level on an intraday basis but the stock didn’t go that low and pullback only briefly. GMO then ended the day closing near its high of the day.

Irregardless of today’s bullish action there are a few cons that come to mind:

  • I still am not a huge fan of the stock’s trading personality. Not exactly a smoothly trading stock.
  • The peer stocks in the Molybdenum Sector Overview Chart were mostly down today.
  • The Molybdenum leader, NYSE listed TC – Thompson Creek Metals looks like it might roll over.

GMO General Moly AMEX Bullish Price Action Technical Analysis Chart

Up-to-date GMO – General Moly chart on my public list.

GMO – General Moly might develop into the new leader of the Molybdenum realm and money flowing out of TC might find its way into GMO. Considering the fact TC’s market capitalization is roughly five times the one of GMO I would consider this scenario to be rather unlikely though. I would stay cautious and watch TC – Thompson Creek Metals for clues as where the Molybdenum stocks as a group are headed to. The best setup would be a small bullish consolidation pattern forming with GMO and the breakout of that pattern coinciding with a price recovery in TC. One cannot ignore GMO’s strength but right now it still feels like the stock is somewhat fighting the tape when it comes to the overall sector’s performance. I think a TC recovery will provide a great opportunity for GMO – General Moly to outperform.

Volatility often occurs after extended rallies and before significant pullbacks.

My public list with all my charts can be viewed here:

Buenas noches.

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