Avion Gold Corporation (TSE:AVR
) (PINK:AVGCF) got stuck next to an important resistance zone paired with increasing volatility, which threatens the established price uptrend.
AVR hit a new 52-week high on Wednesday after breaking above $2.40 and settling for a 1.7% gain for the day. 5.7 million shares traded hands during the day, which was significantly above the average of 3 million.
The price didn't close above an important resistance though, only poked above it intraday and formed a dangerous doji candle over the session. Technically it still continued the longer term uptrend, but it can‘t last if the stock won‘t start making sustained new highs. The situation had already got tense a week ago when the price started going up in leaps, which inevitably led to a correction.
On the brighter side, the market cap went above $1 billion for a short while amid the trading session.
AVR stock is closely related to gold price as larger market valuation for the precious metal means a direct increase in the company‘s bottom line. The company recently announced a 27% quarter over quarter increase in gold production and aims to produce 100 thousand ounces of gold in 2011. The CEO sees the business doubling this capacity in 2012.