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Shares of Russia-focused platinum miner Eurasia Mining plc (LON: EUA) appear ready to break out of the ascending triangle pattern shown in the daily chart below. Will the shares head higher or lower.
The company’s shares were unable to break above the triangle pattern despite announcing a significant joint venture agreement with the Russian state-owned company Rosgeo expanding its mining assets portfolio on the Kola Peninsula.
Eurasia Mining shares rallied higher briefly but later gave up most of their gains and headed back into the triangle pattern. The miner’s shares have since fallen to the triangle’s edge and are threatening to break lower.
Investors seem unconvinced about the mining company’s prospects, given that it is actively looking for a suitor despite doing well as an independent entity and being a significant player in the platinum group metals sector.
The pullback in Eurasia Mining’s share price following such a significant positive announcement is not a good sign, and investors are hoping that all is okay with the company.
It is not clear why the company is looking for a suitor, but the current dynamics place the firm in a weaker negotiating position, given that it is the one looking for potential suitors.
Markets understand that it is always much better for a company to be fending off potential suitors than for it to be looking for a suitor as the former position laces the firm in a strong negotiating position compared to the latter.
Eurasia Mining is down almost 18% this year but is still up over 900% due to last year’s impressive gains. Investors will be relieved when the company announces that it has found a serious buyer or scraps the entire initiative.
Until we get a solid picture of where the miner stands in finding a suitor, its shares shall be under constant selling pressure.
Eurasia Mining share price.
Eurasia Mining shares are trading within the ascending triangle pattern above but could break down and head lower.
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