Bushveld Minerals: Bull flag breakout targets towards 6p

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Bushveld Minerals: Bull flag breakout targets towards 6p

Like many of its contemporaries in the mining-minnows space, it has taken a while for Bushveld Minerals (LON:BMN) to catch up with the bullishness of the giants of its sector since the beginning of last year.

Although I am slightly concerned that an earlier and more aggressive interest rate hiking cycle by the Federal Reserve may hurt the mining sector, it is probably the case that the US stands alone in this respect. It could also be the case that Trump’s infrastructure bazooka and corporate tax cuts would more than offset this attempt to return monetary policy to normal.

In the meantime we are still seeing a decent turnaround for leading mining stocks which began to spill over to the small caps last year. This is largely, but not exclusively, off the back of newsflow. In the case of Bushveld Minerals we have seen excitement relating to what has been described as a game changing acquisition of Strategic Minerals Corporation from Evraz Group.

The latest positive is that Bushveld Vameco has provided required proof of funding, resulting in a fresh break for the shares to the upside. Indeed, the technical view at this stage is that provided there is no sustained weakness (a weekly close) below the floor of the bull flag / 50 day moving average at 2.63p, we could see a journey to the top of a rising trend channel at 6p over the next 2-3 months.

bmn chart

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