Chakana Copper (TSXV:PERU) - Fibonacci Retracement Triggered a Buying Signal on August 3, 2021

On August 3, 2021, a notable buying signal was generated for Chakana Copper Corp. (TSXV:PERU), a mineral exploration company based in Vancouver, Canada, which primarily engages in the exploration and development of mineral properties with prospects for copper, gold, and silver. This signal was indicated by a Fibonacci retracement strategy.

Fibonacci retracement is a popular technical analysis tool used by traders to identify potential reversal points in the price of a security. This technique utilizes horizontal lines to highlight areas of potential support or resistance at the key Fibonacci levels before the price continues in the original direction. These levels are determined by drawing a trendline between two extreme points (a swing high and a low) and then dividing the vertical distance by key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%.

On the trading day of August 3, 2021, Chakana Copper's stock price formed a significant retracement point that aligned with a key Fibonacci level. According to the principles of the Fibonacci retracement strategy, this pointed to a possible price reversal, serving as a buy signal for the stock. It's important to note that Fibonacci retracement levels are not always perfect predictors of price movements, but they serve as useful tools for investors to consider when planning their trading strategies.

The timing of this buy signal was especially noteworthy as Chakana Copper had been advancing its Soledad project, focused on high-grade copper, gold, and silver discoveries in Ancash region, Peru. The company had also recently received approval to drill on high-priority targets, including the Mega-Gold intrusion-hosted copper-gold zone and the La Joya high-sulfidation epithermal gold-silver zone. This potentially increased the stock's value proposition, making it an attractive investment at the time.

In conclusion, the Fibonacci retracement strategy played a crucial role in generating a buy order for Chakana Copper on August 3, 2021. This example serves to illustrate how such technical analysis tools can be used alongside fundamental analysis to make informed investment decisions. However, it's worth reminding that like all investment strategies, the Fibonacci retracement strategy should not be used in isolation but as part of a comprehensive investment approach.

Diverging from the previously mentioned method of technical analysis, Crux Investor's investment strategy places a minor emphasis on technical indicators such as moving averages. Instead, the investment strategy of Crux Investor heavily relies on fundamental analysis for their investment decisions. Just like any investment approach, it's paramount for investors to undertake their own research and gauge how much emphasis they should give to technical analysis when handling their investment portfolios. By studying various analytical methods and acknowledging their individual risk tolerance, investors can formulate a personalized strategy that harmonizes with their financial objectives and market outlooks.

To find out more, go to the Chakana Copper website