Breaking Out: Spartan could have room to run amid gold's strong form

Breaking Out is a technical analysis-fuelled, short ‘n’ sharp take on chart-busting ASX stocks. Each week, Steve Collette – head of Collette Capital in Melbourne – narrows in on something that’s caught his eye.

Spartan Resources (ASX:SPR)

Spartan has been one of the very best stocks over the past 12 months.

The rapidly emerging gold play is up more than 3x in price terms from 12 months ago, whilst also being more than 25% off highs at the time of writing.

Whilst putting this move together, it created one of the best uptrends in the market, with no real pullbacks of note given the underlying volatility in the name.

The consistency of the trend from June through September is particularly noteworthy.

The gold sector has moderated somewhat in the aftermath of the election in the States, according to participant positioning as well as decent strength in the USD post the outcome.

The underlying trend remains intact, however, for both gold the commodity and Spartan the equity.

Spartan is no minnow at well over $1.3bn in market cap these days, but it is not wanting for liquidity, and that is good news on the ASX.

With prospects for the USD to take a breather in the short term, and a regrettable escalation in the Ukrainian conflict overnight, Spartan looks to be an intriguing entry at current levels, with a stop on a close below recent lows at 109.5c.

On the upside, there is a fantastic gap that wants to get filled back to 148.5c – and that is the immediate target.

Beyond that, a retest of all-time highs at 167c is entirely plausible.

Collette Capital offers IMA services to wholesale clients only.

The IMA has returned 17.89% p.a. net of any fees as at end October 2024 since January 2015.

Learn more at www.collette.capital Collette Capital is a Corporate Authorised Representative (CAR: 128443) of Sanlam Private Wealth (AFSL 337927 ), and only provides general advice.

Collette Capital advise that they and persons associated with them may have an interest in the above securities.

The views, information, or opinions expressed in the interviews in this article are solely those of the contributing author and do not represent the views of Stockhead.

Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

At Stockhead we tell it like it is. While Spartan Resources is a Stockhead advertiser at the time of writing, it did not sponsor this article.