Mining stock optimism – and AIM hesitation

This mining stock looks golden, while the junior market’s stutter needs explanation.

Orosur Mining and the AIM

Orosur Mining Inc (LSE:OMI) looks fairly optimistic, and we wonder if speculation is rife, perhaps due to expecting some positive news. The immediate situation suggests strength above 30p should make an attempt at 38p, matching the closing price highs from October last year.

The important thing comes if the share finds an excuse to close a session above 38p as we can calculate the blue downtrend since 2011 is liable to find itself in jeopardy, due to our secondary working out at 48p.

This level of secondary is liable to prove serious for the longer term, starting a chain of events and creating a scenario with 93p possible in the future.

For now, Orosur looks positive, the price needing to drift below 20p to give a hint of panic. This is because 12p represents the 'ultimate bottom', a point we cannot calculate below.

The AIM

Our previous thoughts on the AIM gave 1,192 points as an initial target. This level was achieved in the last five sessions and the index is certainly showing signs of hesitation, rather than powering on toward our secondary 1,233.

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This particular stutter is a very slight worry, suggesting coming weakness below 1,175 shall attempt an initial 1,160 points with secondary, if broken, at 1,139 points.

The larger problem comes if 1,139 breaks, as the effects are liable to ripple through AIM constituents, stifling many potential gains until such time the market gets itself in order again.

We'd certainly been curious how long the junior UK market would continue to humiliate the FTSE 100 with six months of very successful performance. The AIM, presently at 1,176 points, would be at just 850 points if it were following the pathetic FTSE example!

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of interactive investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.