RE:Orvana's 6 Year Bottom and Wyckoff AccumulationGanndolph, good summary of the consolidation phases we have been through. The long term chart IS very supportive, however as I see it, the top in the current ongoing consolidation range is at 0.4 CAD and for me this is the crucial level. Once we pass that we have finally reached lift-off, an initial movement to 0.7 to 0.8 and after that a possible steady advance towards the old ATH. Successful start up of the OSP and Taguas well on its way towards SOP supported by a continued strong POG we could be there by second half of 2022.
Of course I would also love to see faster development at Orvana, especially when it comes to the OSP and it has been kind off frustrating with a lot of repeated promises of action. But I am not surprised as the strategy has been pretty clear set by our dominant and long term shareholder, no dilution, everything paid through generated cash-flows/loans and minimize the long term risk. That's why things have been moving so slow, in the quarterly updates mostly just repeating what was stated in the previous updates and no real execution. First they needed to consoidate and make Orovalle a steady long term producer generating positive cash flows. With that now in place, focus is shifting towards growth. And following the news flow, things are really picking up speed now.
Me myself, I'm in no rush, I have been picking up shares time to time, when price swings have given opportunities and I can wait another year or so if there is a 5-10 bagger at the end of the tunnel from where we stand right now.
ganndolph1 wrote: Guide to Orvana's 6 Year Bottom and Wyckoff Accumulation
Phase A: Phase A marks the stopping of the prior downtrend. Up to this point, supply has been dominant. The approaching diminution of supply is evidenced in preliminary support (PS) and a selling climax (SC). These events are often very obvious on bar charts, where widening spread and heavy volume depict the transfer of huge numbers of shares from the public to large professional interests. Once these intense selling pressures have been relieved, an automatic rally (AR), consisting of both institutional demand for shares as well as short-covering, typically ensues. A successful secondary test (ST) in the area of the SC will show less selling than previously and a narrowing of spread and decreased volume, generally stopping at or above the same price level as the SC. If the ST goes lower than that of the SC, one can anticipate either new lows or prolonged consolidation. The lows of the SC and the ST and the high of the AR set the boundaries of the TR.
Sometimes the downtrend may end less dramatically, without climactic price and volume action. In general, however, it is preferable to see the PS, SC, AR and ST, as these provide not only a more distinct charting landscape but a clear indication that large operators have definitively initiated accumulation.
In a re-accumulation TR (which occurs during a longer-term uptrend), the points representing PS, SC and ST are not evident in Phase A. Rather, in such cases, Phase A resembles that more typically seen in distribution (see below). Phases B-E generally have a shorter duration and smaller amplitude than, but are ultimately similar to, those in the primary accumulation base.
Orvana selling climax was on January 18,2015 with a low at 10.5 cents CAD. The AR point followed on May 2, 2016 with a rally back up to 30 cents CAD.
Phase B: In Wyckoffian analysis, Phase B serves the function of “building a cause” for a new uptrend (see Wyckoff Law #2 – “Cause and Effect”). In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing shares at lower prices and checking advances in price with short sales. There are usually multiple STs during Phase B, as well as upthrust-type actions at the upper end of the TR. Overall, the large interests are net buyers of shares as the TR evolves, with the goal of acquiring as much of the remaining floating supply as possible. Institutional buying and selling imparts the characteristic up-and-down price action of the trading range.
Early on in Phase B, the price swings tend to be wide and accompanied by high volume. As the professionals absorb the supply, however, the volume on downswings within the TR tends to diminish. When it appears that supply is likely to have been exhausted, the stock is ready for Phase C.
Phase B accumulation started in the summer of 2016 with the test of the AR on August 8, 2016 with a high at 36.5 cents CAD followed by long sideways trading action culminating in two tests of the bottom of the trading range August 13, 2018 and November 26, 2018 with lows at 12 cents CAD. Phase B ended with the July 2019 rally that provided weak longs with the opportunity to get out at 40.5 cents CAD.
Phase C: It is in Phase C that the stock price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to be marked up. As noted above, a spring is a price move below the support level of the TR (established in Phases A and B) that quickly reverses and moves back into the TR. It is an example of a bear trap because the drop below support appears to signal resumption of the downtrend. In reality, though, this marks the beginning of a new uptrend, trapping the late sellers (bears). In Wyckoff's method, a successful test of supply represented by a spring (or a shakeout) provides a high-probability trading opportunity. A low-volume spring (or a low-volume test of a shakeout) indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position.
The appearance of a SOS shortly after a spring or shakeout validates the analysis. As noted in Accumulation Schematic #2, however, the testing of supply can occur higher up in the TR without a spring or shakeout; when this occurs, the identification of Phase C can be challenging.
The shakeout phase followed in the fall and winter of 2019 as operators pushed the stock back down to 12 cents CAD on December 16, 2019 followed with another spring down to 11 cents CAD on March 2, 2020. Every weak long that could be pushed out of Orvana was gone by this time.
Phase D: If we are correct in our analysis, what should follow is the consistent dominance of demand over supply. This is evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume, as well as reactions (LPSs) on smaller spreads and diminished volumes. During Phase D, the price will move at least to the top of the TR. LPSs in this phase are generally excellent places to initiate or add to profitable long positions.
With the breakout in POG in full swing during the summer of 2020, buying interest in Orvana shares increased and the stock moved back to the top of its trading range on August 4, 2020 at 31.5 cents. During the following 3 months Orvana made a higher LPS low at 22.5 cents CAD on September 28, and tested that low on November 23, 2020. The next step, the "Sign of Strength" (SOS) on high volume happened yesterday on both the Canadian and US markets.
On the point and figure chart of ORV, ORV made a double top breakout on high volume with a price target of 64 cents CAD short term. The ORVMF chart in the US has a bullish point and figure price target of 58 cents USD.
Next up is Phase E where demand for ORV is in "full control" and ORV starts its long awaited mark up phase
Phase E: In Phase E, the stock leaves the TR, demand is in full control and the markup is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived. New, higher-level TRs comprising both profit-taking and acquisition of additional shares (“re-accumulation”) by large operators can occur at any point in Phase E. These TRs are sometimes called “stepping stones” on the way to even higher price targets.
IMHO, the next thing that I am looking for is for Orvana to jump the creek at the top of the old trading range and to establish a new higher trading range with the bottom being the top of the old trading range, and with the excellent fundamentals, long mine life, and an Oxide Stockpile Project at Don Mario reported in the latest presentation slide 22 as a New Oxides Processing Circuit (200K Au OzEq stockpile). At $4.20 USD copper, that number is low--me thinks the oxide stockpile has a value of 350K Au Oz Eq at $1900 USD POG.