Interest in Mainland Resources Inc (OTC:MNLU) is rising as the stock exhibits interesting technical properties and might be trading too low considering the current situation of the company.
The stock could easily ramp up another 5.5 cents, before the resistance at 0.36 kicks in. That would deliver a hefty 18% gain for traders even without breaking out further.
Trading volume was over 1.2 million during Wednesday’s trading session and was nearly 6 times the 200 day average.
Stock price didn’t move much even during the heavy trading and stayed within the established channel, thus the volume points towards ongoing accumulation and a possible breakout.[BANNER]
The price has been diverging with the movement direction of MACD indicator for an extended period. Right now, passing above the 50 day MA could work as one of the benchmark breakout signals, along with two resistances set at 36 cent and 40 cent levels. A pattern similar to a descending triangle can be spotted forming as well, slightly favoring the possibility of downside breakout.
Mainland resources runs two oil and gas properties in the southern United States. Their capital position is rather good – over $5 million in cash and only $2 million in short term liabilities, plus they own $7 million worth of properties. The market cap of $24 million puts the P/B ratio at 2.5 at the moment, still leaving some reasonable space for appreciation.
