We Plan The Trade. You Trade The Plan
If a picture is worth a thousand words, this chart should be worth several thousand dollars. The stock has been a consistent performer and has established several trends. Since history tends to repeat itself, we can use this trending data to take a trade with a solid risk/reward.
We can see that 3 times SUBB has bounced off the horizontal trendline after a pullback. The first two times this happened, the stock hit overhead resistance at the trendline. Both times it pulled back directly to the horizontal line.
We just witnessed a 3rd move off this pivot point. Using historical data to make an educated decision, there is a solid trade buying here and looking to see at the overhead trendline which at current levels appears to be between $0.21-0.22. That's a potential 25% return!
Obviously below the trendline support would be a safe place for a stop loss order. This is approximately 1.5c below current levels, or an 8% risk. So we are looking at a potential Risk/Reward of 1:4 which is clearly in our favor.
Now let's dig deeper....
When a hot momentum stock announces an Acquisition of a functional Diamond Concession exploration company, Diamonds aren't only a Girls best friend - but a huge catalyst for growth
Is SUBB a Diamond in the Rough?
SUBB is a development company engaged in the evaluation, acquisition and exploration of highly prospective mineral properties.
SUBB is a participant in the multi-billion dollar diamond industry which now adds another dimension to its growth potential. This industry is growing and has gained notoriety recently with a proposed buyout of industry Stalwart Zales Inc (ZLC) in a $1.4 Billion takeover.
SUBB is set to benefit from strong industry projections for precious metals and is peaking at precisely the right time.
SUBB has just recently signed the acquisition agreement that will see the company take hold of its diamond mine concession in the Central African Republic.
Diamonds are a girls best friend - tell me more!
SUBB has an option to acquire a 100% interest in a Chilean Maritime concession located in the area known as Bahia de Lota (Lota Bay), Municipality of Lota, Concepcion province, Chile. This option is the first of what is anticipated to be a full and expanding portfolio of exploration stage mineral projects throughout South America.
SUBB indicates that Lota Bay is a bituminous thermal coal deposit that lies on the sea floor to a depth of 10 meters and is directly adjacent to the shoreline, and is easily accessible by local industrial infrastructure, including a major dock and processing plant facilities.
What is the potential market for this product?
Rough diamond prices to skyrocket in 2018
A steady diamond demand in the United States, paired with an ever growing appetite for these precious stones in China and India, are some of the main factors expected to cause a major gap in global supply and demand, sending rough diamond prices through the ceiling by 2018.
That is the main conclusion of a recently published report by Bain & Company and the Antwerp World Diamond Centre (AWDC), which also warns of major consequences of this sharp price increase for industry players up and down the value chain.
In Global Diamond Industry Report 2013, the authors forecast that rough diamond production will grow at an average annual rate of 4.8% from now until 2018, reaching a peak level of 169 million carats and a production value of $19.6 billion. This could be good news for African producing nations such as Zimbabwe, Botswana and the Democratic Republic of Congo (DRC).
According to expert in the field, these countries, together with Russia, are estimated to account for 84% of expected global 2013 diamond production of 130 million carats.
Several Reasons to Consider
▪ SUBB is in a potential breakout off a strong support, and appears to be forming the next leg higher. This situation might be worth watching very closely for a positive move in the stock, which should take it back towards previous highs.
▪ SUBB has positioned itself in a ubiquitous niche with a tremendous need one which is constantly growing. Take a look in your wife's jewelry box and you will see the need for smaller companies like SUBB to fulfill a major need.
▪ SUBB is trading at a capitalization of only $56 Million which places it less than potential revenues from a major find. This does not even take into account organic growth from current acquisitions yielding future discoveries. These factors give ample room for an upside move.
Where it goes from here - stay tuned until tomorrow's update. Put SUBB on watch right now and honor all stop orders.
