The share price of Canadian gold company Zodiac Gold (TSXV: ZAU / WKN A3EKSC), operating in Liberia, is currently making its second attempt to break through the 0.40 Canadian dollar mark. Following a very steep rise last October, 0.40 CAD was reached once on an intraday basis. After that, the price declined for four months within the red trend channel—support from the 200-day line ultimately stopped the decline. In mid-February, accompanied by consistently higher volumes, the still-intact upward momentum established itself, driving the price above both green trend lines to just below 0.40 CAD.
What are the chances that this level can be overcome?
Both moving averages continue to rise steadily, and the 100-day line is running consistently well above the 200-day line, which is encouraging.
The buy signal from the MACD indicator, which was generated six weeks ago, remains intact. The blue line crossed above the red line—two weeks ago it became close for a few days, but the blue line managed to stay above the red line, keeping the signal intact.
The trend confirmer has been running above the neutral 100 for several weeks and is therefore clearly positive—with an increasing tendency.
The Overbought/Oversold indicator does not suggest an overbought assessment. At 1.0, it is clearly positive but still well away from 2.0 (from which point the indicator is considered overheated)—in the past, this has occurred twice so far.
The Chaikin Money Flow is also positive—the uninterrupted run in the green zone since mid-February indicates steady capital inflow. Since the short-term decline two weeks ago, it has been trending slightly upward again.
