Technical Analysis: Up over 300% in a month! Is further steam left in Besra Gold Inc (ASX: BEZ)?

Highlights

• Besra Gold Inc. (ASX:BEZ) is a Malaysia-based gold mining company focused on the exploration and development of the Bau Goldfield in East Malaysia
• BEZ shares have been rising over the last one month, and are up over 300% in the same time frame
• Will the ongoing rally in BEZ shares continue further? Here’s a technical view

Besra Gold Inc. (ASX:BEZ), which holds nearly 92% stake (directly or indirectly) in the Bau Goldfield, is on a roll. Shares of this yellow metal producer have soared over 300% in the last month, rising from AU$ 0.60 on 21 March 2023 to AU$ 0.257 as on 20 April 2023.

The rally in the shares of the gold producer started on 23 March 2023, after the company announced securing funding up to US$300 million on 21 March to bring its Bau gold project to production in East Malaysia. On 23 March itself, BEZ shares ended 80% higher. As per the company, the funding was one of the largest financings of its kind undertaken by any company listed on ASX. The company said the funding agreement provides a clear path to gold production.

The stock saw a further up move of 40% on 30 March after the company announced final assay results of the 2022 drilling program, which strengthened Bekajang’s gold mineralisation potential. The stock touched a 52-week high price of AU$ 0.28 on 13 April 2023.

Will BEZ shares rally further? Let’s analyse the technical chart of Besra Gold Inc. to get a view of where the gold stock is heading.

Besra Gold Inc. (ASX:BEZ) Technical Analysis

On the daily chart, while in a short-term rally, BEZ's stock price is forming a negative divergence compared to the RSI (14-period), it indicates that the price might see a correction soon. Furthermore, the stated indicator, with a value of 70.54, began to move southward from the overbought zone, supporting the negative bias. However, prices are trading above the trend-following indicators 21-period and 50-period SMAs, which might function as support levels for the stock. The stock's main support level is AUD 0.200, while the major resistance level is AUD 0.260.

Daily Technical Chart – BEZ

The support and resistance levels were evaluated as per the closing price of AUD 0.230 per share of 13 April 2023, down by 9.80%.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock, and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period, prices are currently in a bullish trend (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, prices are currently in a bullish trend (Vice – Versa).

The Orange/ Yellow colour line represents the Trendline.

The Purple 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.

Disclaimer

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