Gediminas Jasionis
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AXMIN Inc. (CVE:AXM) (PINK:AXMIF) Price Rally Hits Resistance

by Gediminas Jasionis Jan 23, 2011
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AXM_chart.pngAXMIN Inc. (CVE:AXM) (PINK:AXMIF) price rally has stopped at the 22 cents resistance at the end of the trading week. The situation shows a correction might be underway.

Trading volume wasn't meaningful on Friday's retraction, but the historical price action shows that's one signs of short term reversal. A day earlier the volume topped 6 million shares, yet the resistance at 22 cents was left intact with the only breakout attempt failing by the end of the session. This clearly showed there is not enough buying power to push up at the moment, and profit taking further hurt the price on Friday.

Axmin_logo.jpgThe uptrend in price sticks around since late December, when the company did a $975 thousand private placement in exchange for a mix of warrants and shares priced at $0.25 and $0.30. Such a pricing should also prohibit further price appreciation on the market.

The company is using the cash to finish a feasibility study for Passendro Gold Project and for exploration of other permit areas in the Central African Republic. The market cap has gone up to over $113 million upon hitting the resistance, which is twice the net tangible worth of the business. Since there are no revenues, the market value mostly relates to the value of properties owned and potential of mineable resources on them.

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