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Palladon Ventures - technical assessment Clive Maund 18 April, 2005 written 11 April, 2005 With Palladon being in the news in recent days, it is timely to take a look at it from a technical standpoint. A fundamental assessment of the implications of the financing announced on Friday has been made by Bob Moriarty of 321gold, which can be read by following this link. Here we will confine ourselves to an assessment of the technical condition of the stock. Starting with the 1-year chart, we can see that the stock traded in an increasingly narrow range last fall, searching for a bottom, following a period of decline. It then broke out above its 200-day moving average in February and spiked dramatically on huge volume. This resulted in its becoming hideously overbought leading to the inevitable reaction. There was a day in mid-March when the price fell heavily intraday to find support at C$0.70, and this appears to be happening again today, with the price looking set to close near the high for the day. If it does it underlines the importance of the support at C$0.70 as a line which should hold. In other words C$0.70 is probably the low - which means that given the large potential upside we now have a very favourable risk/reward ratio, as agile traders can simply ditch it if it closes below C$0.70. Actually, traders have two choices here, the one already mentioned, which is to buy around the current level and automatically exit should C$0.70 fail and then possibly buy back on a retreat towards strong support in the C$0.50 area, should this come to pass. The other choice is to buy some here, and more should it break lower towards the C$0.50 area. The first makes more sense in that it avoids a significant loss, but involves the risk of being whipsawed out and then left behind. This is a stock that looks like it wants to go higher again, although it may possibly mark time, perhaps for a month or two, before it does so. A long-term chart going back nearly 6 years gives overall perspective. On this chart we see that the ascent out of a low panlike base got underway in mid-late 2003, while the subsequent correction during 2004 can be viewed as a downsloping Handle to this Pan, and the fact that it took the form of a falling wedge was a good indication that another advance was in the offing. The stock continues to look overbought on this long-term chart despite the reaction - but remember this is a chart going back 6 years. Palladon Ventures Ltd, PLL on TSXV, trading at C$0.80 at 1.32 pm New York time on 11th April 05 Palladon Ventures website. Clive Maund email: support@clivemaund.com website: www.clivemaund.com Clive Maund is an English technical analyst, holding a diploma from the Society of Technical Analysts, Cambridge, England. He lives in Chile. Visit his subscription website at clivemaund.com. [You can subscribe here]. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis. Copyright ©2003-2011 CliveMaund. All Rights Reserved. Charts courtesy of StockCharts.com. 321gold Inc