LBSR Liberty Star Uranium & Metals Corp Consolidates Today

The mining penny stock LBSR today moved into a consolidation stance and looks like it will finish with a doji indecision candlestick.  There was gain a semi large topping tail on the daily candlestick that somewhat mirrors the topping tail of yesterday as well.

Volume also dried up markedly today and is suggesting in the short term that momentum is starting to shift.

I am going to make a short term forecast for early next week but keep in mind that these short term forecasts can be very variable as far as specific timing.  I think we could go into a one or two day retracement early next week perhaps down to the .042 level as the low point and then some type of intra day reversal back topside again.

The reversal may be enough to get LBSR back up to .07 again which may then cause some new sellers to come in again.  If so, then it could cause a drift down back to .045 again for another retest and then an eventual new trend build higher.

The above forecast is very speculative.  But overall today I have to say that the action in LBSR is still very encouraging.  We have recently completed 3 white soldiers candlestick pattern which is a very strong indication of who is in control.  The fact that we sold off today should not be seen as extremely unusual.  In fact, given the fact that this is a mining penny stock it should be seen as a normal garden variety pull back today.

I am writing this update as of 2:48 PM eastern time on August 13, 2010 and so I cannot be sure exactly how we will close yet on LBSR.  If by some lucky chance LBSR closes near the top of the range today then it may hint that today’s doji candlestick was simply the half way point resting point.  If that is the case then we could trend higher very strongly early next week.  Still, the volume is lightening up today and so my bias is that we consolidate in the scenario I already outlined earlier in this post.

In our opinion, strength has to be the presumption with LBSR.  Any pullbacks should probably be seen as opportunities for accumulation, again in our opinion only.

I really do not have anything negative to say about LBSR as this point.  If the earlier scenario plays out then we should see .043 as the low sometime next week and then an upwards reaction from that level.  I am seeing signs that this penny stock is being accumulated consistently.

One thing I can almost guarantee you is the LBSR will once again move into another sideways type consolidation at a higher level.  This next consolidation will be the key for next price evolution.

I should say that it is also a definite positive for the mining sector in general to have the very seasonally strong month of September coming up.  That is about as good a scenario as one could ask for in terms of timing.  In addition the seasonally strong penny stock trading season also runs from September  to January time frame.  So in our view there should be plenty of room for more upside surprises in LBSR.

Lastly, you probably know by now that I rarely if ever discuss fundamentals here at penny stocks penny stocks dot com.  But I should say though that the fact that LBSR is working a deal with a more established mining company Northern Dynasty Minerals Ltd is an extremely positive sign from a fundamental standpoint.  Northern Dynasty Minerals Ltd current market cap is about 632 million dollars.  I do not ever recall since I began trading penny stocks, when a penny stock actually had a real tangible working relationship with a major mining company.  This fundamental fact makes this a unique situation.

There have been other penny stocks in the past that have had a lot of speculation of being associated with a much larger mining company, but that was only pipe dreams and speculation.   In this case it appears to be real and meaty enough that you can sink your teeth into it.

So yes, I focus on technical analysis of penny stocks here, but that does not mean that one should give some consideration to outside fundamental developments that may be ‘game changers’.  Most penny stocks don’t get good breaks like the one LBSR has right now.  Their potential massive resources in the ground, a rising gold and uranium price in September 2010, make for a possible perfect storm for this penny mining stock…

More developments to be posted as warranted…