CNL.TO Continental Gold Price Chart – Technical Analysis Update

by Olivier on December 8, 2010

Most stocks took a breather today. The same applies to CNL.TO – Continental Gold. From a technical standpoint there is nothing in the chart that tells me I should be concerned about. This still very much looks like constructive bullish technical action as the huge run-up is being digested. Nothing goes up in a straight line. Remember to be patient with your winners. What makes me label the action as being constructive is the fact the recent pullback is very shallow and, what is much more important, volume is decreasing significantly. That’s exactly what you want to see when price retreats.

It is difficult to draw flag type consolidation patterns into the chart as it is still too early. We would need a few more pivot points in order to determine where to draw trend lines. That being said, for now CNL.TO looks like it wants to consolidate building out a sideways trading range or a rectangle consolidation pattern if you prefer. Hence the drawing of horizontal lines in order to determine support and resistance levels. The gap area I drew into the chart should now act as support. That doesn’t mean price cannot dip into the gap area. Still, I would expect buyers to step in should CNL.TO – Continental Gold reach those price levels.  The ideal scenario would be for price to reverse and move back to the upside if that price zone is hit. We’ll see what happens. CNL.TO – Continental Gold has basically no overhead resistance and as I wrote in a previous post, I expect CNL.TO – Continental Gold to reach a price target of at least 15$ over the next 6 – 12 months.

CNL.TO Continental Gold TSX Colombia Mining Stock Consolidation Pattern Technical Analysis Chart Price Target

Up-to-date CNL.TO – Continental Gold chart on my public list.

CNL.TO remains one of the best looking charts in the Colombian gold miner realm. That’s why I firmly believe it is the best bet if you are looking for the next VEN.TO – Ventana Gold. Enough said. The smart thing to do is to let the charts do the talking.

The art of trading is handicapping probabilities and making assumptions about scenarios playing out knowing that at the same time the market can do anything. The trick of the trade is trying to identify when a scenario is not playing out as expected. Easier said than done. As Bernard Baruch said, “Speculation is about anticipating the anticipators.” – Jeff Cooper

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

Buenas noches!

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