Gediminas Jasionis
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BlackPearl Resources Inc. (TSE:PXX) (PINK:BLKPF) Lays Low After Price Collapse

by Gediminas Jasionis Aug 10, 2011
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pxx_chart.pngTraders appear to have settled on BlackPearl Resources Inc. (TSE:PXX) (PINK:BLKPF) stock valuation and the price might be entering a short period of consolidation from what can be perceived.

It seems that PXX won't manage to recover from the recent price collapse anytime soon. Bulls and bears showed to be of equal power as the price action formed a doji candle for the day. This was rather expected after seeing how a heavy trading volume of 4.7 million recorded yesterday was not enough for stock price to cover the gap-down it made on Monday.

The sell-off apparently wasn't based on fundamental changes or direct news. From a technical perspective this was an overwhelming reaction to the recent price breakdown on a downtrend extending since mid-July.

black_pearl_logo.jpgThe last time the price was at the current level, in October 2010, it consolidated for roughly a month before moving further, despite strong preceding uptrend. This suggests that $4-$4.5 channel could successfully hold off the current breakdown as well.

Fundamentally the situation is controversial, thus the adequate indecision on the market:

• Net tangible worth is $503 million, less than half the market value of $1.25 billion;
• $120.5 million in working capital;
• Revenues basically flat;
• Managed to make bottom line black over the latest quarter;
• Cash flow turned negative setting back the cash account by $26.4 million.

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