Westgold Resources Ltd. 

Westgold Resources Limited (ASX: WGX) is a minerals exploration company primarily engaged in operating gold mines in Australia. The company’s projects include Central Murchison Gold Project (CMGP), Fortnum Gold Project (FGP), Tuckabianna Project, South Kalgoorlie Operations (SKO) and Rover Project.

As per our previous report on WGX as on March 08, 2021, we recommended a ‘Buy’ rating on the stock at AUD 1.915 from the technical analysis standpoint. The stock made a high of AUD 2.16 as on March 10, 2021 and witnessed an upside movement of ~12.79 percent from the recommended entry price. On March 11, 2021, our recommended trailing stop loss of AUD 2.133 was triggered in the stock on closing price basis; however, considering the recent price action, and technical indicators analysis, we are of the view that the stock may continue with an upside momentum and hence we recommend a ‘Hold’ rating on the stock. The summary of our previous ‘Buy’ rating, target levels, and price movement since the previous recommendation with the revised trail stop loss for WGX is provided as below:

Price Action Analysis (on the Weekly Chart)

WGX’s prices recently broke the downward trendline resistance level of AUD 1.97, which seems supportive of an upside move. Prices are also getting support from upward trendline. The next important resistance level appears at AUD 2.40 and prices may test that level in the coming sessions. 

On the weekly chart, RSI has moved up to ~45 from 38 level and indicating a positive trend for the stock.  Volumes are showing an increasing trend, further providing strength to the prices.

Conclusion:

Based on the above-mentioned price action and technical indicators analysis, we can conclude that WGX is still looking technically well-placed on the chart and we recommend a ‘Hold’ rating on the stock at the close price of AUD 2.12 as on March 11, 2021.

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, and social and political instability risks etc.

Note: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume and we consider stocks with greater than or equal to 500,000 volumes as more liquid. Liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is March 11, 2021. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

AUD: Australian Dollar

RSI: Relative Strength Index 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se.  Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer  

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