Nikolay Tomov
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CGA Mining Limited (TSE:CGA), (ASX:CGX) Flared with a 4-month High on the Canadian Market

by Nikolay Tomov Jun 6, 2011
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CGA_Minig_-_Chart_-_6_June_2011.jpgThis is one of the stocks that produced a volume flare on the Toronto Stock Exchange (TSE) last Friday. Indeed, on that day the trading activity for the shares of CGA Mining Limited exceeded more than five times the average. At the same time, the price remained virtually unchanged. No company developments have been spread this month.

In such a case, we cannot name the exact reason for the increased turnover of the stock (TSE:CGA), (ASX:CGX) on the Canadian Market. Now and then, CGA Mining comes out with such periodic volume spikes. This year, we can see more than ten occasions when over 1M company shares have been traded.

Friday's volume was remarkable too - 2.84M, which was a four-month high. As for the price, CGA closed at $2.50 with almost no change from the previous close. Presently, the stock is slightly above its 6-month low of $2.45, fixed two weeks ago in May. Is there a chance for the shares to quickly climb up to their high levels in February, when CGA was traded above $3.2?

The chance does exist, but how probable is it? Judging by the latest company developments, we should expect the stock to start flying any minute. In late May, the company festively announced two "milestone achievements" regarding its Masbate Gold Project in the Philippines: a) to have achieved 12 months (5.6 million man hours) without a lost time injury; b) to have poured 10 tonnes of gold at the deposit. The announcements were addressed to the Toronto Stock Exchange and to the Australian Securities Exchange (ASX).

The financials of CGA Mining look as solid as a rock. This might give a solid base for a possible rise in the share price too. In the end of March, the company had a cash position of more than $86M and a working capital of almost $57M.

CGA_Minig_-_Logo_new.jpgOn the other hand, a bearish MACD cross-over implies a probable decline in the price of the stock. However, technical indicators usually require confirmation and are less reliable than the company's fundamentals. It means that the positive factors around CGA Mining prevail far much over the negative.

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