Company Overview: Emerita Resources Corp. (TSXV: EMO) operates as a natural resource company, which engages in the acquisition, exploration, and development of mineral properties located in Spain and Brazil. 

Canada Market Round-Up

The benchmark S&P/TSX Venture Composite Index (TSX: ^JX) started the week on a positive note. However, it later shifted to negative territory.  On May 2, 2024, the index closed at 580.42 with an overall week-to-date (WTD) loss of 1.045%.

According to the daily chart analysis, the index prices are currently below a descending trendline, suggesting a potential medium-term consolidation period. The 14-period leading indicator Relative Strength Index (RSI) is around the midpoint, displaying a reading of approximately 54.159, which indicates a neutral market sentiment. Moreover, the prices are trading above both the 21-period and 50-period Simple Moving Averages (SMAs), which might function as a supportive zone in the near future.

Global Markets Wrap-Up 

On May 2, 2024, the S&P 500 index settled at 5064.19 with a WTD loss of 0.70%. Moreover, tech-heavy NASDAQ composite decline by ~0.55% on a WTD basis and settled at 15840.96, whereas Russell 2000 settled at 2899.544, reflecting a loss of ~-0.571% on WTD basis.

Considering the US market's performance over the week, following the significant global macros and data front, and analysing the S&P/TSX Venture Composite Index, one TSXV-listed stock fist the criteria on the technical framework: Emerita Resources Corp. (TSXV: EMO). The recommendation on this stock is based on the generic insights, entry price, target prices, and stop-loss for the next 2-6 weeks:

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Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

On the Weekly chart, EMO's stock price has found support from an ascending trendline, suggesting further upward movement potential. The 14-period Relative Strength Index (RSI) is positioned above the midpoint, reinforcing the positive outlook. Additionally, the stock has reclaimed its 21-period and 50-period Simple Moving Averages (SMAs), further supporting the positive sentiment.

The upcoming resistance level is projected around CAD 0.58, and the stock may encounter this level within a short timeframe of 2 to 6 weeks. If the price surpasses CAD 0.58, it could potentially trigger more buying activity in the stock.

Technical Analysis (On the Weekly Chart)

On the Daily chart, the momentum oscillator RSI (14-Period) is showing a reading of ~56.628m levels, indicating positive momentum. The weekly volumes also seem supportive of an upside movement. Further, the current market price (CMP) is above the trend-following indicators 21-period & 50-period SMAs, which may act as the support levels.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Emerita Resources Corp. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decisions should be made depending on an individual's appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of recommendations is as follows:

Upcoming Major Global Economic Events

Market events occur daily depending on the data's frequency and generally include updates on Bond auction , PMI and Unemployment etc. The upcoming week's major global economic events that could impact the S&P/TSX Venture Composite Index and listed stocks' prices are noted below.

Related Risks: This report may be looked at from a high-risk perspective and recommendation is provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the 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, social and political instability risks etc.

Note 1: Individuals can consider exiting from the stock if the Target Price or Stop loss mentioned as per the technical analysis has been achieved and subject to the factors discussed above. 

Note 2: How to Read the Charts?

The Green color line reflects the 21-period moving average, while the red color 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 color 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 color 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. Liquidity in stocks helps in easier and faster execution of the order.

The Orange color 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.

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: In general, it is a level to protect further losses in case of unfavorable movement in the stock prices.

Risk Reward Ratio: The risk reward ratio is the difference between an entry point to a stop loss and profit level and the report is based on ~60% Stop Loss of the Target 1 from the entry point.

A trailing stop-loss is a modification of stop-loss in case of favorable movement in the price to protect the gains. Individual can Trail the Stop-Loss as per the levels if the stock price achieves more than 50% of the Target 1. Individual should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

The reference date for all price data, currency, technical indicators, support, and resistance levels is May 02, 2024. The reference data in this report has been partly sourced from REFINITIV.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

CAD: Canadian Dollar

RSI: Relative Strength Index 

Note: Trading decisions require a thorough analysis by individuals. Technical reports in general chart out metrics that may be assessed by individuals 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.