AIM-listed miner could be worth 30% more
By Alistair Strang | Tue, 2nd August 2016 - 10:00
AIM-listed miner could be worth 30% more
When we last viewed miner BMR Group (BMR), we were quite optimistic for its future but, as usual, tacked on an illustration warning of criteria for weakness toward 3p with ultimate 1.75p. Thankfully, we proved a wee bit wrong as the share 'only' weakened to 3.1p and now, has enacted something rather more than a classic bounce.
Assuming the company doesn't choose to torpedo the rise by issuing negative news, the situation now is of anything above 5.375 pointing toward 5.575 with secondary 6.35p - maybe 7.5p as the gaps foul our numbers.
While the initial movement to 5.575 sounds useless, this is - from our perspective - a dreadfully important waypoint. Should BMR's mid-price better this level, it should find it hard to avoid growth to 6.35p.
The fly in the cliché is shown with a Dashed Blue line. This is the downtrend since April 2015, created since the share recovered from suspension. Our secondary ambition gives the price of BMR a half-decent chance of closing above this line (5.697p at time of writing) and hopefully entering a new phase of its growth potentials.
We've tacked on a somewhat distant 9.1p at the top of the chart. It would be easy to also display double-digit numbers but realistically, only once BMR actually closes above its last highs of 6.9p will we take them seriously and issue an update. For now, that Dashed Blue line bothers us a little.
Of course, there's always the risk the market treats this with similar contempt to that shown against Gulf Keystone and Xcite Energy. The price of BMR would require actually close below 4.25p before we'd raise an eyebrow as it could easily return to 3p again. With secondary 1.75p!