Equinox Gold Corp (EQX) is a Canadian mining company with a portfolio of production, near-production, and exploration-stage projects. The company’s principal assets are the Aurizona gold project in Brazil and Castle Mountain. It also has an interest in the Koricancha gold milling operation in Peru.
In the most recent quarter, the company produced about 125,000 ounces of gold. It also had a good safety record for the quarter. While EQX has dealt with setbacks due to COVID, the company bounced back and the Delta variant had minimal impact on the operations. The firm continues to be on track to build one mine per year.
EQX has a current ratio of 3.1, which indicates it has more than enough liquidity to handle short-term obligations. Sales growth has averaged 295.5% per year over the past three years. The stock also looks undervalued with a trailing P/E of 4.35 and a forward P/E of 8.39.
The stock has shown long-term bearish momentum, but performance has been mixed since August. This is evident in the chart below.
Take a look at the 6-month chart of EQX below with my added notations:
EQX has formed an up-channel chart pattern over the past couple of months. A channel is formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to channels, any (3) points can start the pattern, but a 4th test or more helps to confirm it.
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A long opportunity could be entered on a breakout above trendline resistance. A short trade could be entered if the channel resistance were to break below the channel support.
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EQX shares were trading at $7.88 per share on Wednesday morning, up $0.25 (+3.28%). Year-to-date, EQX has declined -23.79%, versus a 17.42% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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