Is the sun shining again for the stock of Eagle Hill Exploration Corporation (CVE:EAG), (PINK:EHECF)? It looks so. Having declined to a five-month low of $0.19 earlier this week, now EAG bounced slightly up. The advance was confirmed by a huge volume beating more than five times the average. No fresh company announcements were issued.
There must be some reason for the 10% progress of the stock on the TSX Venture Exchange yesterday. EAG finished trading at $0.22, while the turnover reached almost 1.38M shares. There is a huge and interesting discussion about Eagle Hill in the stock forums. Some people there suggest that shorter’s covering activity is responsible for the performance of the shares. This is a possibility, indeed. We have no data at our disposal to confirm this, though.
We may point out at least two favorable factors that could aid the stock performance in the future. One of them is the great potential of the Windfall Lake Property, as the corporation claims. Earlier this month, Eagle Hill announced promising assay results from eight drill holes made in accordance with the company’s drilling program. Also in the beginning of May, the corporation closed a $4M financing which will be used for the further development of Windfall.
Back in March, Eagle hired SRK Consulting to prepare a mineral resource estimate for Windfall. There are people in the stock forums who are on the opinion that this is “a world class” mining evaluation firm.
On the other hand, some negative factors also deserve to be noted. They could, perhaps, present an obstacle for a significant rise in the share price in the future. The corporation relies on one deposit only, and is not in the production stage. In case in turns out that the Windfall project does not possess the mineral reserves which Eagle believes it owns, then the skies will get dark for the company.
The huge stock dilution should be, perhaps, another concern for the corporation’s directors. In view of all these, may we ask once again: Is the sun shining for Eagle Hill, or will the dark clouds cover it?
Technically speaking, it is interesting to see whether EAG will climb to the upper Bollinger band in the near future. The bullish MACD cross-over implies a possible increase in the share price but this needs confirmation.
