Shares of Bushveld Minerals Limited (LON: BMN) bounced off a significant support level a few days ago, leaving many investors wondering whether the long-awaited rally has finally kicked off.
The vanadium miner’s shares have been falling since January after hitting a high of 24p, with the downtrend being strongly in place up to. Several attempts by the bulls to rally have been met with stubborn resistance from the bears.
Bushveld’s shares recently plunged lower after its workers staged unprotected industrial action at its Vametco site in mid-April over payments expectations under an employee participation plan.
The recent bounce off support was fueled by the resolution of the industrial action leading to the resumption of operations at Vametco as workers started returning safely to work. However, the bounce occurred at a key support level, hence, its significance.
I had covered Bushveld minerals before. We discovered that the miner's fundamentals were pretty solid, driven by the rising global demand for vanadium and its prudent expansion plans that could lead to higher future revenues.
However, the company’s shares have lagged our lofty expectations since they have been falling since January, and downtrends have quickly followed the few rally attempts.
Bushveld has a lot going for it, including the fact that it had cash reserves of $50.5 million at the end of December 2020, which was more than enough to cover its operational costs for 2021.
I remain long-term bullish on the company, and I’m eagerly waiting to see if the support level will hold over the coming days, triggering a rally in the stock.*
*This is not investment advice.
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