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Some long-term Buying opportunities

Lesley Beath  |  07 Dec 2010Text size  Decrease  Increase  |  

Page 8 of 8

Mirabela Nickel Limited (MBN)

Technical Recommendation: Buy

Stop/Loss: $1.63

(Click here for MBN fundamental research and company information)

Technical View

MBN declined by 92% between May 2008 and January 2009. It then rallied sharply (+420%) to the September 2009 high, before declining by 55% into late October 2010.

Volume and momentum indicators suggest that the stock has been basing since late August, and the recent break above the April downtrend has resulted in a sharp move to the upside.

In Monday trading price has pushed above the September and October highs, completing a small base formation. The next resistance is the 200DMA which currently sits at $2.05. Given the strong gains over the past few days, this resistance could curb upside potential in the near term; but from a longer-term perspective the stock is positive.

A move to test the September 2009 downtrend is likely over the next few months; this gives upside potential to approximately $2.36.

MBN is rated as a Speculative Buy.

The stop-loss level is $1.63.


MBN chart

(click image to enlarge)