This is from another Forum (to see chart slide bar at bottom)

Tyc – I will start with your last question first and then address the chart. As I see it, the particular quote that you selected from Jesse Livermore is not relevant to the current EVG.v chart. He refers to a gradual turndown after a long and steady rise. It is a different kind of situation than what we have with EVG.v. EVG.v made an explosive move up from 0.44 to 1.94 or about 340% in two weeks. This was followed by a relatively steep three and a half month decline of almost 50%.

According to both Sinclair and LeFevre’s book, Livermore ultimately believed that the big money is made by identifying a major trend early, taking positions and riding the bull all the way up. He discusses the danger of “losing your position” in a major uptrend and cautions against trying to trade every reaction.

I think Livermore would say that gold is in a major bull market and that investors should buy and hold quality gold stocks as a way to participate. Whether one chooses ETF’s, mutual funds, seniors, mid-tiers, juniors or some combination is dependent upon such things as the particular investor’s knowledge, experience, risk tolerance and willingness and/or ability to perform due diligence. Despite the fact that management has exhibited arguably questionable judgment in financing-related matters recently, EVG.v has fundamental merits that make it at least worthy of consideration for those whose investment criteria accommodates junior exploration companies.

It is impossible to know with certainty whether Livermore would have classified EVG as a quality gold stock. To speculate, I think he would say that if you believe EVG is a quality gold stock, then it should be held if you own it and bought here if you don’t.

Now let us turn to the current daily chart:




Price: The daily chart shows EVG.v’s price in a downtrending channel that began at the end of July when the stock peaked at 1.94. For the succeeding three and a half months, the stock has been making a series of lower highs and lower lows. The stock was approaching the bottom of the channel when it hit 0.89 towards the end of October but found support there at a level just above the 200 day EMA. Since then the stock has been making lower highs but has not made a lower low as it trades into a tightening range. Price appears to be getting compressed with the 10 day EMA acting as overhead resistance and the 200 day EMA acting as support. The recently announced PP at 0.90 may bolster the support at that level.

Volume: The volume spike of 15MM+ shares right at the beginning of EVG.v’s explosive move up sticks out like a sore thumb on the chart. Connecting the highs since then makes a downward slope that, coincidentally, is parallel to the downward price channel. The declining volume indicates that the momentum of the downside move is waning and that selling pressure should be abating. Any significant move - up or down - consumes a considerable amount of energy and once that energy is exhausted the trend can reverse.

Indicators: RSI, MACD and Stochastics are all in short-term uptrends. While not yet conclusive, these are the inklings that reinforce the notion that the next major move for this stock will be up. To me, these appear to be positive divergences from the downtrending price.

Conclusion

On a technical basis, EVG.v appears to have done sufficient work in time and price on the down side required to consolidate the preceding move up. Volume is indicating that downside momentum is, or is close to being exhausted. Other indicators are showing the first signs of a positive divergence from price. Taking in to consideration the current bull market in gold, the potential size of the Rattlesnake Hills deposit, the large number of assay results that are pending and the quality of the geological team that is advancing this project, my completely wild speculation is that Jesse Livermore would rate Evolving Gold as a conviction buy.