Pretium Resources (NYSE:PVG, TSX:PVG) has dropped more than 40% since the beginning of the year, shaving roughly C$1 billion off its market cap. Grade control issues at its Brucejack Project in addition to reduced production guidance have resulted in what can now be called an outright crash in PVG shares since the company delivered a production update before the market open on January 23rd:
PVG (Daily - 3 Year)
No such thing as a triple-top right?
Not true, as can be clearly seen in PVG with peaks near US$12.50 in July 2016, February 2017, and October 2017. The decline since January 23rd has been by far the most powerful sell-off in PVG's history, and even makes the 2013 crash look rather tame by comparison due to the massive volume associated with this month's decline.
From a technical perspective PVG is now more oversold than it was at the May 2017 low (after which PVG rallied ~20% in less than two weeks). Moreover, the US$7 level represents major long-term support/resistance. This combination of being extremely oversold and being near a major technical potential support level make the current situation extremely interesting; below US$7 there is a minor support level near US$6.50, however, a long term breach of US$7 would confirm that PVG is now in a long term bear market cycle - on the flip side a rally back above US$8 over the coming weeks would likely confirm that a major panic low was put in place during the recent sell-off.
Shrewd traders should watch the price/volume action around the US$7 level closely over the coming days for clues/hints of institutional accumulation. Are the larger volume trades (block trades) taking place on the bid or the offer? Is the stock closing in the upper quartile of its daily range or in the lower quartile? Are there signs that selling pressure has abated and buyers are beginning to retake control?
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