Gediminas Jasionis
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Freegold Ventures Limited (TSE:FVL) (PINK:FGOVF) Holds Gains After Breakout

by Gediminas Jasionis Nov 28, 2011
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fvl_chart.pngFreegold Ventures Limited (TSE:FVL) (PINK:FGOVF) stock price saw a furious breakout on Friday but had no news to back it up.

FVL stock price shot up 18.6% on Friday on a massive breakout composed of short squeezes and opportunistic buying pressure. The accompanying trading volume was highest for the past year at 725 thousand and nearly ten times above the average of 78 thousand.

The facts that FVL lacked any related news makes it pretty obvious that the breakout happened on technical reasoning only and some short squeezes might have propelled the rise unwillingly.

The buying was strong because the stock broke out of a technical very difficult situation - it passed above 50 and 200 days moving averages as well as resistance at 70 cents per share. This has now become support and should allow bull to keep at least a fragment of the initial gains. The stock has corrected 10% down today shortly after the market opened, but seems to be holding the gains pretty successfully.

freegold_logo.jpgFrom a fundamental perspective the company currently carries a market cap of $32 million, which is slightly below their net tangible worth of $35.8 million. This fact supports the increasing share price, although to a limited extent as Freegold currently has no income and every quarter brings in a slight loss from operations.

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