Bulls failed to put up a fight for Great Western Minerals Group LTD. (CVE:GWG) (PINK:GWMGF) today, ending the trading session with a minor loss and setting a precedent for further decline.
The price action wasn’t favoring the bulls for the whole day, except for the opening – GWG started the day with over 5% premium. The current price weakness is partially a result of a general bearish sentiment that has entangled the market in the recent days.
Trading volume was insignificant today as it was lower than the 90 day average. The current price action is fairy important in the short term as the stock dwells around a significant support at 70 cent and has already attempted to break down.
Continuing weakness could very well lead to a prolonged decline if the large batch of orders at the support gets taken out.
Since the beginning of the year, the share price was inflated and supported by various news, including the offering and a follow-up acquisition of 92.6% ownership of Rare Earth Extraction Co. Limited. The price is now fading away with no more significant news to hold it up. Clearly, a $248 million market cap cannot be sustained for long when the underlying business is worth ten times less, produces flat rate revenues and the bottom line is constantly red.
