Far East Capital Newsletter
Seeing some green shoots in the charts
18 Apr 2020

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Seeing some green shoots in the charts

Stock markets are rebounding after the virus-induced collapse, even though we still don’t know where we are going or how long the world economy will be on ice. Interestingly, mining stocks seem to have been the most resilient in this tumultuous time. Many of the charts are taking on new uptrends as they rise from the depths. The green shoots are appearing.

Gold stocks continue to shine and are well sought after by investors, notwithstanding the higher volatility that has seen the bullion price plunge from time to time. The groundswell of opinion is that the gold sector is where the opportunities lie. The gold producers are making good money in most situations. However, it may be that the penny pinchers could be excused for thinking they are looking expensive given the recent strength. If so, then what is the next best way to play the gold sector?

Maybe it’s the emerging developers coming through the system, but there could be more upside with the successful explorers that still have a long way to go before they have fully defined their deposits. On a risk/reward balance, I prefer these new stories for their expanding information curves. If it is a good story, with strong geological results to back it up, it is worth having a crack at. If the good results keep coming it is hard to find better leverage. The latest company of this ilk to cross my desk is Chesser Resources (CHZ), with Resolute Minerals (RML) hot on its heels. 

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