Boxxer Gold Corp. (CVE:BXX) (PINK:BXXRF) had a mix of news and an appropriate trader reaction driving the share price on Monday, but the greedy profit takers put a stop to further increase in value.
Things got exciting when Boxxer claimed to have expanded their gold-silver zone at Crescent Peak. The sampling program run on the property helped to identify significant precious metals mineralization along the 1.7 kilometer strike zone which the testing concentrated on.
Boxxer also stated to have nearly completed the survey on their other, Boss, project and the results should be anticipated in couple weeks time frame.
Sudden share price rally had some signs of short squeezes to it – moving up fast shortly after the announcement, but failing to sustain the trading volume throughout the day. Follow-up is not happening, even thought the price gaped up to open higher on Tuesday.
Following the rally, a new support area can be identified at 23-24 cents per share. Trading volume is still significantly above average, but if the rally ultimately fails the short sellers could come back with somewhat 5 cents per share (or 17%) before this support kicks in.
The reasons behind a possible rally fade lie in the interpretation of the mining results as well as the historic layout of the share price chart. While the company successfully confirmed the continuous precious metals mineralization, the news just proved earlier assumptions.
One can also notice that this is the fourth time the share price had gone up significantly since late 2009. Each time a slow depreciation followed the spike, but never went bellow the support levels established by previous price movements. This provides a basic heads-up on what can be expected if no more striking news come out.
