W Resources: Back to key 0.35p – 0.4p support zone

It can be said with a certain amount of regret that shares of W Resources has not exactly joined the mining sector party. Perhaps now at the start of 2017 the company’s time has finally come?

The Iberia focused mining group appears to have talked the talk and walked the walk – to borrow an horrific cliché, for an extended period. However, even to this day the market does not appear to fully be in sync or sympathy with what is going on either above or below ground. True, Tungsten which is the core metal in terms of the business model, may not yet be flavor of the month. But even with the latest revelation regarding the Sao Martinho Project in Portugal in terms of hitting 56.4m of Gold, investors seem to be nonchalant at best. The explanation may partly be due to the drip drip of placings in the past – however, there is little shock value here. Otherwise, the mystery of W Resources lowly rating could simply be due to the market wanting to see it further down the production curve. This is even though the CEO Michael Masterman is an experienced hand in the sector, with a “been there, done that” badge which comes from having built up a multi million dollar mining company in Australia in the last cycle.

From a technical perspective all of this means that we should be looking to the one year support zone of 0.35p – 0.40p as being the absolute floor for the shares, with ideally no dip even below the top of this band. This is the case for an initial early 2017 return to the autumn 2016 resistance of 0.6p. Given how extended the base building has been here one would imagine the next weekly close above 0.6p would be the start of an extended rally.