The usual then – Nov 19, 2012 - and now charts;
That, by the way, is a 20% move. There is alternation between waves 2 and 4 and consequently we are now in wave 5 down with a probable target of about $18 where it would, presumable, be a buy for at least a bounce back to $23, give or take.
The stock has gone to the top of the b-wave on the way down (see previous blogs) and has done so in a plausible corrective manner, an a-b-c with a nice wedge in the c position. It may yet get to $33.45 but it is hardly worth waiting for. A sell.
This is not intended to be a wave count! $13.25 is about where both legs are equal (not including the first down leg). Mathematically speaking the stock came from a low of $6.10. With a high of $18.25 it must have travelled $12.15. Therefore, as this is the first major pullback after a 5-wave sequence on would expect a drop to about the previous 4th wave and about 50 to 62%. The 4th wave is at about $11 and if we deduct either $6 or $7 from $18.25 we get a range of roughly $11 to $12. On balance a buy at $12+ and for dare devils at around $13 where the trend line is, see below.
The a-b-c may already be complete!
This company has been around for a very long time, going back all the way to 2007! It also has a pretty posh address, 20 Toronto street, Toronto. But the performance has been a wee bit lackluster over the past two years or so. This despite it’s stated goal of quote – focusing on shareholder value through its exploration and development efforts in South America – unquote. The main project is now in Columbia, about 100 km south of Medellin. Quinca is the name. We would sell this stock on the basis of the EW pattern, which is either an a-b-c up (in black) implying a low below the previous low (in 2009), or a completed 1-2-3-4-5 sequence to the top followed by an a-b-c down which does not look complete yet.
There are a few fundamental reasons to be cautious as well. First of all the company has gone through almost $40 mln. during it’s existence, $8 mln. just in the last year. There is still $4 mln. in cash, enough for less than 6 months. After that the company would have to raise new capital, not that easy at this time and given the record. Secondly their is remuneration of directors and key personnel as follows
(b) Remuneration of Directors and key management personnel of the Company was as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 011
Salaries and benefits $ 27,251 $ 53,333 $ 175,383 $ 74,333
Share based payments $ 224,333 $ 219,120 $ 480,002 $ 903,020
Somehow I get worried when more is paid by way of stock than salary AND when huge amounts are paid as consulting fees to related parties,as follows;
12. Related party balances and transactions (continued)
(i) Consulting fees charged by Anthony Roodenburg, former Chief Executive Officer and Director of Seafield. $385.000
(ii) Consulting fees charged by James Pirie, former Vice President of Exploration and Director and former Chief Financial Officer (acting in the capacity of) of Seafield. $385.000
(iii) Rent charged by Greencastle Resources Ltd., a company that Anthony Roodenburg and James Pirie, director and former officers of the Company, are also directors and officers of Greencastle Resources Ltd. $22.500 etc. etc.
In short, a sell even at 11 cents.