Chart check Sitka Gold: Next upward push on the horizon

The optimistic outlook of the previous chart check on July 6 on the shares of gold explorer Sitka Gold (WKN A2JG70 / CSE SIG) has certainly been confirmed. By September, the share price had risen by around 50%, followed by a sustained consolidation to date. In chart terms, a flag formation has formed since then (thick blue flagpole and two blue lines bordering the flag). If the price were to break out of the flag significantly to the upside (yesterday there was already an initial price above the blue line), this would open up further upward potential. According to chart theory, the price could go up from the breakout point as far as the previous vertical extension of the flag including the pole (indicated by the two blue arrows) – this is approx. 10 cents. The technical price target would therefore be in the range of 0.25 – 0.30 Canadian dollars.

There are certainly signs that the upward breakout may succeed.

The 100-day line is clearly rising and has already crossed the 200-day line to the upside (technically a medium-term buy signal). The 200-day line has slowed its rise since August and is moving almost sideways – but is not falling.

The indicators shown are showing the first signs of an upward trend reversal. The MACD recently generated a technical buy signal when the blue line crossed upwards through the red line. The trend confirming indicator was able to overcome the downward trend – the neutral 100 is coming into view – above which this indicator would be positive again. On the Chaikin Money Flow, the decreasing expansion into the red zone indicates that the outflow of capital from the stock (which has only lasted 3 weeks) is coming to an end. The overbought/oversold indicator has also ended its downward trend (after being considered overbought for a short time in July with values at 2) and is still in positive territory, but is still far from overbought status.