Explor Resources Inc. (CVE:EXS) (PINK:EXSFF) share price passed the 50-day moving average on the way down and dropped more than 7% over the last trading session.The stock trades in a volatile descending channel. Usually such a condition leads to an upside breakout, but in this case the preceding price action was not right. The best choice would be to swing trade the existing channel while it lasts.
Currently, support is around 40 cents. The price needs to break the 200-day MA that is now $0.51 for confirmation. The situation is attractive as a drop to the $0.40 calculates to 20% potential profit on a short sale.
Fundamentals also suggest the slight decline over the appreciation. P/B ratio is currently at 2.7, allowing for further decrease in value as there is no income and Explor retains impaired liquid capital position. The company constantly relies on private capital placements, which hurts existing shareholders by creating stock dilution.
The last update on operations, made two days ago, announced the beginning of up 2500 meter diamond drilling on the Destor gold property. This is part of a 10 hole drill program planned on the property after the company completed a VTEM survey.
The fact this news didn’t attract any reaction from traders supports the idea of further price depreciation.
