Zak Mir’s three shares to buy for August By Zak Mir CEB Resources (CEB): 1p Target After Narrowed Losses As far as technical traders and investors are concerned there is nothing that lifts the spirits, and hopefully later the bank balance than the type of chart pattern currently
the potential upside scenario. This is likely to consist of a move to the top of the rising trend channel from April, a suggestion which while admittedly appearing to be over optimistic, does base itself on what has been a very con-
displayed on the daily timeframe of CEB Resources.
structive reversal / turnaround.
The reason behind this relative good cheer is the way it is possible to draw a rising trend channel from the end of April. This has guided the stock higher in a quite spectacular fashion, although it can be seen that in the post June period there has been a period of consolidation. This bottomed out towards the 0.4p level, well above the former initial 2015 resistance at 0.35p. The general rule is that when you see new support come in well above former resistance a very constructive technical set up is being former, and this certainly looks to be what is going on at CEB Resources.
We have the top of the May price channel so we are being primed for a target at the 3 months resistance line projection as high as 1p, a move that would easily take out the former 0.75p June peak. The timeframe is the next 2-3 months, while the stop loss is an end of day close back below the 50 day moving average at 0.42p.
CEB Resources is sporting the type of encouraging picture which should allow us to be generous in terms of
From a fundamental perspective the driver in the near term could very well be the recent news from the company which could ironically be argued did include one of the best phrases from the stock market – narrowed losses. This was achieved via gains from disposals , a $219,000 win on CEB’s coal investments in Poland and Australia, meaning that the annual loss was just $122,000 as com-
UK Investor Magazine — 4 — August 2015
pared to $701, 000 previously. Now that this is out of the wake it is likely that the focus will be on the latest deal which is an oil & gas joint venture in Indonesia. The rumour is that this company could be on the right side of 1,000 bopd output, which is not insignificant for a £3 million market capitalisation company. EMED Mining (EMED): Milestone Event Targets 7p Initially EMED Mining is, and has been, on the watch list of most private investors as a star minnow in its sector. However, just like many star prospects in this space the timing of the journey from hot prospect to even hotter reality, there have been timing issues. In particular, the process leading up to production at the Rio Tinto Copper Project has been an extended one. However, the doubts were apparently ended in January this year with final permitting being approved. At that time production was set to come in the autumn of 2015, with the company being awarded the final license to get the project underway in July. This has been described as a “milestone” moment, and one
would have difficulty disagreeing with the concept, especially as it would appear that EMED Mining is fully funded. Given that the market has been waiting 10 years for the Copper Project to come on stream it is clear that one‘s patience has been a virtue in a manner which is totally alien to the AIM market, and presumably now that the waiting game is finally over fans of this company should have a decent trajectory in terms of a significant mining play over the near term. Moving along to the technicals and it is clear that partly due to the vagaries of the fund raising process and of course the 4 year collapse in the mining sector, the charting pattern has taken the form of a three steps down / two steps up decline over the post 2013 period. While it may be the case that for the rest of this year it is the fun-
damentals which are the driver for the share price – and particularly the newsflow, it seems logical that the March floor of 3p will not be broken given the transformation just reported by EMED Mining. In the short term there is triple tested support at 4p, marking out a significantly higher support zone versus March. This is expected to hold, or even if it does not, any breakdowns should be only temporary. Otherwise, those who require a little more convincing regarding EMED Mining would wait for a technical momentum signal such as a weekly close back above the 200 day moving average now at 5.05p to suggest it is worth going long. Above the 200 day line the first chart target is the main summer 2014 resistance at 8p over the following 2-3 months. Infrastrata (INFA): 8p In Focus For H2 2015 Infrastrata, like many other minnows of note, first came to my attention in terms of being a potential turnaround stock in the Bulletin Board Heroes video which appears daily on Shareprophets.com. However, notoriety for a
stock from this source tends to be largely on a technical or a trading volume, or even social media basis, rather than fundamentally based. Judging from the recent initiation of coverage by Allenby of the UK focused AIM listed oil & gas play, it would appear that a positive turnaround here could be on the way. The catalysts for this are said to include de-risking and then possible divestment of the Islandmagee Project, the plan to spud Woodburn Forest-1, and securing a foothold in the North Sea. This adds to the way that from a valuation perspective we are looking at a situation where the negative sentiment on this particular part of the stock market in the wake of the great autumn 2014 oil price meltdown suggests we
continues on page
6
UK Investor Magazine — 5 — August 2015