(MENAFN- Baystreet.ca) Gold has cooled off some since surging from $1,269 an ounce in May to as highs at $1,566 per ounce in September, but it certainly is still holding onto the majority of the advance, closing at $1,516 on Friday. Interestingly, last week was the first-time spot gold closed over its 50 day moving average since slipping under it on October 7. In a technician's eyes, this is a bullish signal that gold should be heading higher.
iMetal Resources (TSX-Venture:IMR) also finds itself in an uptrend, rising from 4 cents in June to more than double at a high of 9 cents earlier this month before giving a bit back. Rising to 7 cents on Friday, IMR is following all the rules of a new uptrend by making a higher low and – for students of Fibonacci retracements – holding 50% of the gains.
These are bullish indications for the exploration company.
The catalyst for the steady uptrend is iMetal methodically advancing its large Gowganda West project in Ontario, Canada. The 145-square-kilometer (35,830 acres or 14,500 hectares) is located in the prolific Abitibi Greenstone Belt, host to some of the biggest gold deposits in the world. The Abitibi has given up over 180 million ounces of gold in the last century, yet the majority of the belt remains unexplored.
After a number of successful surveys, studies, sampling and a maiden drill program reinforced the notion that Gowganda West could hold a significant gold discovery, iMetal this month launched the first diamond drill program to add to the data.
Check out the chart below to get a visual of the uptrend and key points for IMR.
First off, the uptrend is annotated in dashed green lines. Importantly, notice the higher lows since touching $0.04 and higher high ($0.09) that are the hallmarks of the trend.
We've also put the 50- and 200-day moving averages in red circles. These are key moving averages for any chart and trading over them is considered bullish, particularly the 200 DMA.
In blue are the Fibonacci retracement lines. As is clear, it is almost uncanny the way charts seem to follow the Fibs, including IMR finding support at 6 cents (38.2%) and rising back up to 6.5 cents (50%).
Going forward, technicians will look for bullish signals upon IMR pushing through important resistance points, These begin with a move over 7 cents (back over the 50 DMA too), which should lend credence to upward pressure building to see IMR take a run at the 200 DMA and a static resistance at 8 cents. Should that be broken, it is highly plausible that IMR is aiming for not only the resistance at the recent high of 9 cents, but also new higher high to continue forming the uptrend.
For short-focused traders, $0.09 is an advance of 28.6% from the current level. Long-term investors will be looking for drilling results that could increase iMetal's market capitalization far beyond the $6.66 million that it stands at currently as the fundamentals and technicals keep improving in unison.
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