Traders seemed very interested in Molycor Gold Corporation (CVE:MOR) (PINK:MLYFF) on Monday, but bulls missed their opportunity to force the breakout.
MOR had gained 14.3% during the day as the accompanying trading volume topped 4 million. The stock price exhibited a standard volatility though, so the number is only impressive when compared to the general market volatility.
The only news issued in January said the company added advisors to the board of directors, so the price action wasn’t caused by a fundamental reason.
No breakout means a further price action is doubtful, but the heaviest trading volume recorded over the past three years indicates that the downtrend might have finally ended.
Recently, the price action was showing signs of consolidation and most likely bears liquidated their positions in the stock, causing the rise in volume and share price.
The company currently holds a market cap of 4.3 million, which exactly matches their book value. Since there is no recent news to affect the price action, the price has very high chances of sticking to this level.
Molycor was low on cash during the last reported quarter, but in general their situation isn’t very bad. It’s a standard young mining business, which has expenses covered by issuing more stock and engages in exploration activities while keeping expenses at minimum. However, the longer news absent periods could be devastating to such a stock as the price tends to fall far below the underlying reasonable valuation when constant dilution drives investors away.
