Junior Miners: The Best Investment Now?
Newsletter writer Stewart Thomson addresses the question: Are CDNX junior miners now the worlds best investment?
All lights are green . . . for the CDNX junior mine stocks machine!
Here's a key chart highlighting today's exciting action:
The technical action is fantastic; a Stochastics buy signal is in play in the momentum zone, and now there's a MACD buy signal too.
All that's needed for a "technical trifecta," is a cross of the lines on the TRIX.
This is all occurring while gold and the senior miners are acting sluggishly. Clearly, the big action is in the juniors, and the only question is, are investors onside?
Here's a look at the weekly chart:
It's almost surreal that a huge 50% rally from here would only put the CDNX at the neckline of its massive H&S base pattern.
Many individual miners could be in 50bagger status from their lows at that point and . . . it looks like it will really happen.
Here's a look at one of the hot ones, Cerro de Pasco Resources Inc. (CNSX:CDPR; OTCMKTS:GPPRF):
The Cerro de Pasco weekly chart is spectacular. There's bull flag action, massive volume, and now a TRIX indicator buy signal too!
Here's another look at it, based on the monthly chart:
Like the CDNX itself, the Cerro monthly chart has a massive decade-long base pattern. The current rally, as spectacular as it is . . . it hasn't even taken the price back to the top of the base.
I like the Peru location. South America is hot right now for a number of junior miners. Clearly, years of bullish action lie ahead for this and many other great CDNX-listed stocks.
Note that while I urge investors to get access to Canadian markets (since that's where most juniors trade), many of them do trade on the US OTC market, and investors can access them there.
Here's a snapshot of another exciting play, Rio2 Ltd. (RIO:TSX.V; RIOFF:OTCQX; RIO:BVL):
The Rio2 operation is impressive. In a nutshell: they have gold in decent jurisdiction Chile . . . and more than 1000 workers getting it ready for early 2026 production.
Here's the daily chart:
This chart is incredibly bullish. New players can buy and use a stoploss under any of the recent lows to keep risk well-managed.
It's critical to keep a steady and constant eye on the CDNX weekly chart when assessing how overbought an individual stock supposedly is. . .
Because what looks like a big rally on the daily chart is generally just a drop in the overall bull run bucket, basis that key weekly chart.
In Oct 2010, I was getting a huge number of emails urging me to "chase price." I called that the "Loss of Sanity" zone.
It's the opposite now. Some savvy investors are wildly excited, but "the crowd" is very quiet. That bodes well for higher prices.
Here's the bottom line:
Chasing overvaluation (like that which exists in the U.S. stock market now) is not wise. Chasing a stock that is still down 90% from its highs, even after rallying 500% from its lows . . . is a play that I'll suggest is likely to be AOK!
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Important Disclosures:
Stewart Thomson: I, or members of my immediate household or family, own securities of: None. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.