Saturday, June 22, 2013

For Whom the Tinka Bell Tolls...

Last time I checked in on June 3, I wrote: "I will add back the 2% if there's either (a) a successful retest of the 200dma, or if (b) it's going to close above the 50dma."  Neither of those criteria materialized, however, in spite of some strength from gold in the interceding weeks. As you can see in the chart below, after being rejected by the 200dma, the lower BB was tested, and then .70 became the new floor.  Friday saw an almost 10cent range, closing strong with a long lower tail at .79, just above the middle BB, which in my preferred setting uses Ira E's 18-day average of closes.  The bar has got a lot lower since the June 3 post, where the 50dma was then above the 200, it is now below it. Overhead resistance next week should be at .83, then .86, then .88. Friday showed strength for the miners in general, though, so Monday will probably be weak, especially if the metals continue lower (and double-especially after the CME 25% margin hike sinks in).  Just looking at the daily chart, I don't see a whole lot to get excited about here with all the overhead resistance, the embedded stochastic low, and the RSI 7 in no-man's land.  Plus, the latest news out of Tinka headquarters, from almost 2 weeks ago, is that they found some zinc.  *yawn*  Still, if it can break through resistance at the 50 and then successfully retest it on the downside, I'll buy a little.  On the lower end, if it is rejected by the 50, I would set a buy order at .70, since that has been a good buy zone for the last month.

The weekly chart is a bit more interesting, in my opinion. As you can see in the chart below, the last couple times there was a lower BB crash--in October '11 and later in December '11--the stock recovered the middle BB.  After first recovering the middle BB in November, there was a retest of the lower BB, then up above the middle AND holding above the 50wma almost in its entirety, with the exception of a bit of weakness from June-August '12. So what I want to see on this chart is a retest of the lower BB, followed by a strong move to close above the 50wma.  That gives me confidence. 

I also want to see some *new* drill news.  If I go back to the news releases from late December '11 to early January '12, what I see is evidence of "finding what we expected," mineralization-wise.  Look at this language from the release (emphasis mine):  "Hole16 intercepted banded, "zebra-stripe" sandstone and progressed into the underlying siltstone breccia and fluidized sulphide unit. This unit is generally quite thin or nonexistent, but it marks the transition between the underlying Pucura limestone and the overlying Goyllar sandstone unit that hosts the bulk of the silver mineralization at Zone 1. The hole intercepted the high grade veins/faults/gossan zones within the sandstone roughly perpendicular to the dip of the hole, while the intervening fracture-controlled mineralization in the sandstone was intercepted at about 45 degrees to the inclination of the drill hole, on average."  I want to see language like this where there is a marked transition to quality mineralization--from zinc to AG.  

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