Gediminas Jasionis
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Gold Reach Resources Ltd. (CVE:GRV) (PINK:GRJVF) Price Action Stays Weak Despite Increased Activity

by Gediminas Jasionis May 3, 2011
GRV_chart.pngGold Reach Resources Ltd. (CVE:GRV) (PINK:GRJVF) stock put up a volume alert, but didn't provide much entertainment on the price part on Monday.

Trading volume spiked as the price approached a support at 60 cents. 1.29 million shares changed hands during the day, which was 22 times the average of 58 thousand. Share price gained mere 4.7% though.

No news was announced, thus the increased activity is most likely a result of random volatility. The stock is notorious for poor liquidity and erratic price moves. If you ignore the fact that technical analysis barely applies to stock of such condition, it can be stated that GRV is basically in a price channel at the time. Shares could bounce back up to 75 cents if support holds. That would mark approximately a 15% gain.

gold_reach_logo.jpgThe last time the volume spiked in a similar manner was back in December 2010. Back then, traders also saw very little reaction of the actual share price movement.

Fundamentals are controversial - market valuation could be higher, but dilution is keeping the price down:

  • Market cap at $10 million
  • Book value at $6.5 million, putting the P/B ratio at 1.54;
  • Enough cash to last roughly three quarters;
  • Constantly issues more stock or debt to cover losses from operations.

Gold Reach is an exploration-stage company with focus on copper, gold, molybdenum and silver. Its two main projects are in British Columbia.

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