The recent share price action of KWG Resources Inc. (CVE:KWG) (PINK:KWGBF) leads to think about a possible bounce down as the company has no strong news and their stock tends to follow the established trading boundaries.
KWG had a 4.7 million trading volume on Thursday paired with a share price advance of 18.75%. However, the action didn’t follow up on that and stock’s value has already started retracing back down. The price action is currently in line with the general downtrend and continues to follow the boundaries of an established price channel. Furthermore, despite the large increase in trading volume the intraday price action depicted a low liquidity rally, meaning there is no strong buying pressure.
The most recent price advance was somewhat encouraged by news, but there was nothing material to them. On October 27 the company reported that a 12 thousand meter drilling program is underway on Big Daddy chromite deposit in the Ring of Fire property in Ontario. According to the press release the initial metallurgical testing and drilling should be completed during Q1 2012. KWG currently holds 28% interest in the claims explored.
The company actually had cash issues for the last reported period but those should now be over as they sold 1% net smelter royalty interests in the Black Thor, Black Label and Big Daddy chromite deposits to Anglo Pacific Group PLC for $18 million in August.
