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Eurasia Mining Shares Recently Fell Below Support Despite Rising Global Palladium Prices

Simon Mugo trader
Updated 10 Jun 2021

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Eurasia Mining logo

Shares of Eurasia Mining plc (LON: EUA) recently broke below the support level identified in my last article as sellers remained firmly in control of the miner’s share price despite rising global palladium prices.

With the majority of its operations in Russia, the mining company has not benefitted from the recent rally in palladium prices driven by the metal’s global supply shortage amid rising demand from manufacturers.

Eurasia Mining’s shares fell from their all-time highs starting in early December before bottoming in January and have been trading sideways since then with a significant bearish bias. The shares recently broke below the lower support level depicted on the chart below and could be headed much lower. 

One of the main factors behind Eurasia Mining’s share price decline is its quest for a buyer, which has not yielded any firm offers for the company to date. 

Since last year, the mining company has been looking for a suitable buyer and has not reported any firm offers from potential suitors. 

Eurasia Mining recently announced that it was ending the official sale process after delays occasioned by the coronavirus pandemic lockdowns that hindered site visits by various interested parties that had submitted initial proposals.

Regardless, the company continues to progress on different fronts, including raising $20 million at the end of May to fund some of its joint projects with Rosgeo, a Russian state entity with which it has partnered on several projects.

Eurasia Mining shares are likely to rally once there is clarity on the way forward for the miner once it outlines the assets likely to be sold after ending the official sale process to focus on asset sales that reduce its overall footprint.

As a trader, I would be looking for swing trade opportunities once the miner’s shares are back within the trading range by buying at the bottom and selling at the top. 

Long-term investors may be best served exercising caution with the miner, given that its valuation will likely be lower in future once it begins the asset sale process. 

*This is not investment advice.

Eurasia Mining share price.

IG chart of Eurasia Mining share price 10-06-2021

Eurasia Mining shares are down 33% in 2021 despite rising Palladium prices as sellers remain in control.

Should you invest in Eurasia Mining shares?

Eurasia Mining shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Eurasia Mining shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading