Traders are getting anxious about Madalena Ventures Inc.(CVE:MVN) (PINK:MDLNF) and are waiting for the promised test results as can be seen from the most recent price action.
MVN stock price gained 9.6% on Wednesday under a trading volume of nearly 6.8 million. With this move the price came very close to its multi-year high at 1.30 per share. Furthermore, the current technical pattern reminds of an ascending triangle which often leads to a bullish price breakout and strongly favors the longs in this particular case.
Madalena had no news since the drilling updates published in December 2011. The update said the company commenced drilling and testing operations on the Coiron Amargo Block in Argentina and run a 3-stage hydraulic fracture stimulation of the Vaca Muerta formation. It also drilled another well to test the southern edge of the same block. It was revealed that drilling and testing results were expected in January 2012, thus traders are still waiting for them.
Despite the favorable layout, the price action shouldn’t become anything more until the update is out. The last trading sessions showed that perfectly – the trading volume was among the highest ever recorded for MVN, and the price still moved in a comparatively conservative manner.
Fundamentals of the business aren’t anything special. MVN holds a market cap of $328 million, which is already far above the book value of $41.9 million. Their current income can’t cover administrative expenses but the company still has a pretty strong cash position. This means things aren’t good enough to generate a price rally, but are favorable enough to keep it at the current level.
