Clive Maund - Tue, Apr 30, 2019

Golden Triangle Stock on Course for 'Summer Drilling Season Ramp'

Technical analyst Clive Maund explains why he believes shares of this Golden Triangle explorer are at a good entry point.

Golden Triangle Region

I consider Aben Resources Ltd. (ABN:TSX.V; ABNAF:OTCQB) to be among the best in the Golden Triangle. Note that the seasonal speculative spikes that we are expecting in these stocks may not get underway until the late summer, so this is more about positioning at good prices ahead of time.

Aben Resources is shaping up nicely for its traditional summer drilling season ramp, which has happened like clockwork during the past three summers. We cottoned on to this annual cycle last year and rode its last ramp, selling half of our holding very near to the top. The reason that Aben and other Golden Triangle stocks have this annual cycle is that drilling ceases during the brutal British Columbia winter and restarts in the spring, so speculators get bored during the winter months when the stock price suffers from attrition selling with few buyers around. Aware of this, we put our best foot forward and bought in back last November, right after it plunged at the point shown on the 6-month chart below, figuring that it was either at or close to its winter low, and that turned out to be the case, so we are now up 50% on this purchase already with much more to come if past behavior is anything to go by. We bought it again in March but this purchase was not so well timed. Even so, we are up.

A moderate uptrend appears to have become established in Aben and within this uptrend a quite sharp rally occurred a couple of weeks ago, with the price then reacting back within what looks like a bull Flag that we will now look at in more detail on the 3-month chart.

On the 3-month chart we can examine the supposed bull Flag of the past couple of weeks in more detail, and bearing in mind how the sector dropped quite hard over the past several weeks, this looks like a ball being pushed underwater here. It looks like a countertrend reaction, especially as volume has dwindled to become light, which is characteristic of a valid Flag. While we cannot rule out a minor short-term dip to the lower Flag boundary, basically it looks about ready for another sharp upleg probably to the upper boundary of the channel. It is therefore rated an immediate buy again here.

The longer-term 3-year chart shows a remarkable chain of regular drilling season spikes occurring during the late summer, early fall. While there is no guarantee that we will see another one this year it is considered likely, and it certainly looks like it is shaping up for one.

The final point and the main point to make about Aben here, is that it looks like it is building up to another dramatic summer spike which is most likely in the July-September timeframe, and will obviously involve it blasting out the top of the channel shown on our charts. That is what we are positioning ourselves for with this. The point to become concerned if it should start to shown signs of deterioration would be if it broke down from the channel and then below the support shown in the 19 cent area. That is not expected to happen but is worth mentioning. Otherwise it looks like is on course for another speculative summer ramp, and is believed to be at another good entry point here.

Aben Resources Ltd. website, ABN.V, ABNAF on OTC, closed at C$0.21, $0.166 on 26th April 19.

Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Aben Resources. Click below for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Aben Resources.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Aben Resources, a company mentioned in this article.

Charts and graphics provided by the author.

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