WEST VAULT MINING INC. Stock: Cup and Handle Formation Analysis

In the world of stock market investing, identifying chart patterns can be the difference between a profitable trade and a costly mistake. One such pattern that has garnered attention is the "cup and handle" formation. Today, we're diving into the stock of West Vault Mining Inc. to see if it's shaping up to be a prime candidate for this classic chart pattern.

Understanding the Cup and Handle Pattern

Before we delve into West Vault Mining Inc., let's briefly discuss the cup and handle pattern. This pattern is characterized by a "cup" that resembles a rounded bottom, followed by a "handle" that forms a slight pause before the stock resumes its upward trend. The cup and handle pattern is often seen as a sign of strong support and resistance levels, making it a favorite among technical traders.

West Vault Mining Inc. Stock Analysis

When examining West Vault Mining Inc. (symbol: WVM) stock, we can see that it has indeed formed a cup and handle pattern. The cup phase began in early 2021, where the stock formed a rounded bottom after a significant decline. This phase was marked by a series of higher highs and lower lows, which is a hallmark of the cup pattern.

As the cup phase came to an end, the stock entered the handle phase, which is currently ongoing. The handle phase is characterized by a narrow range of price movement, where the stock has struggled to break out of its pattern. This phase is crucial for the cup and handle pattern to be confirmed, as it indicates that buyers are accumulating shares at a higher price.

Technical Indicators and Analysis

To further confirm the cup and handle pattern in West Vault Mining Inc. stock, we can look at several technical indicators:

• Volume: During the cup phase, we saw a significant increase in trading volume, which is a positive sign. However, during the handle phase, volume has been relatively low, which is consistent with the pattern.
• Moving Averages: The 50-day and 200-day moving averages have crossed over, indicating a bullish trend. Additionally, the stock has held above its 50-day moving average, which serves as a strong support level.
• Relative Strength Index (RSI): The RSI for West Vault Mining Inc. is currently around 55, which suggests that the stock is neither overbought nor oversold, making it a good entry point for traders.

Case Study: West Vault Mining Inc. Stock Breakout

A prime example of a successful cup and handle pattern is seen in the stock of another mining company, Goldcorp Inc. (symbol: GG). In early 2020, Goldcorp formed a cup and handle pattern, which eventually led to a significant breakout. If West Vault Mining Inc. follows a similar trajectory, it could see a substantial increase in its stock price.

Conclusion

In conclusion, West Vault Mining Inc. stock appears to be shaping up as a potential cup and handle pattern. With strong technical indicators and a similar pattern to that of Goldcorp Inc., it's worth keeping an eye on this mining company. As always, it's crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.