Gediminas Jasionis
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PMI Gold Corporation (CVE:PMV) (PINK:PMVGF) Stock Rides a Technical Breakout

by Gediminas Jasionis Nov 17, 2011
4pmv_chart.pngPMI Gold Corporation (CVE:PMV) (PINK:PMVGF) stock price is on a breakout and could be going for a couple of sessions.

PMV had a substantial price surge yesterday but left longs disappointed as the quick profit taking put a stop to at the end of the day. The stock still added 4.7% during the session under a significant trading volume of 2 million, which was twice the 90-day average.

PMI stock price technically broke out the day before and this appreciation was just a follow-up, expected due to a preceding ascending triangle pattern. The company had no recent news, which means this breakout is purely technical and likely won't last for long.

The last official communication from the company was made on October 26 when they updated shareholders on drilling progress at Obotan project in Ghana. The company then confirmed previous resources estimates and said that pre-feasibility study should be complete by the end of 2011.

6pmi_gold_logo.jpgStock price initially went up on this update but later traced back down and started to form an ascending triangle which has now paid off for bulls.

PMI currently holds a $262.6 million market cap which is 1.8 times the underlying book value of $143.8 million. This means the stock price could continue to rise up to $1.45 per share and it still wouldn't be overpriced as P/B of 2 is rather usual valuation for companies of this type.

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