Tsx BMD.TO Thread

[Naamplao]

Birch Mountain Resources (BMD.TO on the TSX and BMD on AMEX) is a company whose shares I have owned in the past 2006. I was fortunate to buy them in the $3.00 range and sell them near their height in May of 2006 for around $7.50.

May 2006 was not a good time and to me it was the end of the long bull run and the start of the bear that dominates us today.

Here is a short description of the company

Birch Mountain is developing the industrial mineral potential of our extensive mineral properties in the oil sands region north of Fort McMurray, in northeastern Alberta. Limestone from the Muskeg Valley Quarry, (MVQ) is being marketed as construction aggregates and as rock for making concrete and asphalt. Reagent grade limestone can be used directly in applications such as flue gas desulphurization. With the Hammerstone Project the limestone will be processed as quicklime for flue gas desulphurization, water treatment, pulp and paper manufacturing, and soil and biosolids stabilization. Birch Mountain believes the strong global demand for oil and the heightened profile of Alberta's oil sands will ensure long-term demand for our limestone products.

In layman's terms it is a massive gravel pit The Athabasca Tar Sands is rapidly developing with the huge rise in the price of crude oil. Aggregate is in increasing demand for construction as well as pollution control as noted above.

Here is an explanation for the May 2006 as described in this Sept/2006 article at http://www.investorideas.com/insider...les/092806.asp

Birch Mountain shares have been weak since May for at least two reasons. First, oil prices have come down and costs are rising for oil sands producers – which suggests projects might not develop as rapidly as once expected. Next, Birch Mountain has almost run out of money, and it needs to raise capital to fund projects. This could dilute the value of existing shares.

Well since this article the price of crude oil has doubled and the company has reorganized and secured their financing...you can easily find these news releases on Yahoo if you are interested.

Technical analysis

Let's look at the SharpChart

BMD.TO - SharpCharts from StockCharts.com

Quite a fall from $8.00 to where it stands now at $0.48!!! But there are positives in the chart.

The TRIX is on the upswing, The RSI is rising and the BB's are getting tight. You can see a resistance line at $0.52

Is this the bottom??? I am not sure but the stock seems to be rounding out now...

Look at the P&F chart



The resistance line seems a bit higher ...at $0.54 in this chart so let's compromise at $0.53

Note: there is a pennant forming with support at $0.48

I would watch this stock for a breakout above $0.54. If it does happen then the next resistance is at $0.74 then $0.82

If it spikes downward then we should get support at $0.40...fall through this support and then.....well I probably would forget about this stock for a while.

So....I am not recommending a buy at this point as it is prudent to wait for the pennant results and how the stock will break when the BB's stop tightening and expand.

But the price of oil continues to rise and they need rock to build roads/treat pollution. I hope it rises...if this is not the bottom it is worth watching for the rebound.

[Naamplao]

Well if you are wondering where I put my Grand Cache Coal (GCE.TO) money after selling...it is here.

I think this stock is looking good for a rise.

Here is a 3 month view of the SharpChart. I have removed the TRIX (Which is nicely positive BTW) and replaced it with the separation between the upper and lower Bollinger Bands.

BMD.TO - SharpCharts from StockCharts.com

If you look at this chart you will see the bands are getting more and more tight with each day. In fact they are the tightest they've been in the last 2 years....a movement is coming soon.

The accum/Dist is recrossing the 20dayMA for this indicator...(people are buying not dumping) the RSI is a heartbeat away from crossing 50%

Note the position and slope of the Share price...it is above the 20dayMA which is the midpoint of the BB's and it is positive...nice to see.

It is a bit of a gamble but I am betting the spike will be up, not down.

The P&F chart is unchanged from what I showed in the last post.

I think we shall see whether I am correct by the end of the week.

[Naamplao]

Some good news on this company in their recent announcement

Birch Mountain Receives Hammerstone EIA Completeness Decision
Mon May 5, 8:03 AM

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CALGARY, May 5 /CNW/ - Birch Mountain Resources Ltd. ("Birch Mountain" or the "Company") (BMD: TSX and AMEX) announces that Alberta Environment ("AENV") has declared the Hammerstone Project Environmental Impact Assessment (EIA) to be "complete". Completeness is a determination that the EIA has fully met the requirements of the EIA terms-of-reference issued by AENV, and concludes the assessment phase of the Hammerstone application process.

"We are proud to achieve this regulatory milestone and I congratulate the staff and consulting team that have worked so hard on the EIA," says Joel Jarding, President and Chief Operating Officer of Birch Mountain. "The Hammerstone Project includes a six-fold expansion of our approved and operating Muskeg Valley Quarry, and encompasses all of the limestone reserves and the processing facilities needed to make quicklime and hydrated lime defined in the 2006 Technical Report".

In addition, the Hammerstone Project includes plans to produce cement, and to provide facilities for the reprocessing and environmental management of limestone-based by-products produced by the oil sands industry. "Opportunities to create useful products from materials currently considered to be waste, and full life cycle management of other by-products within our reclamation plan, reflect Birch Mountain's emphasis on effective environmental management and performance for our customers and our own operations," adds Don Dabbs, Senior Vice President.

"The Hammerstone EIA completeness decision is a significant step in Alberta's regulatory process, moving the application into the approvals phase. The Natural Resources Conservation Board will now make a "public interest" decision which, if favourable, clears the way to the final approval and operating permits for the Hammerstone Project," explains Mr. Dabbs.

The ability to process their limestone resources on-site will bring a major boost to their bottom line in this non-oil Tar Sands company.

here is the 5 day linechart from Yahoo



It is not clear yet but there is a vague trend to the positive.

BMD.TO - SharpCharts from StockCharts.com

Another peek at the sharpchart shows the BB's tightening slightly more, the RSI, TRIX, Share price and Accum/Dist are positive. The share price is above the 20dayMA so the spike in share price when the BB's expand should be in a positive direction.

Looking good.

[Naamplao]

A nice 4% gain yesterday. Here is the SharpChart

BMD.TO - SharpCharts from StockCharts.com

I replaced the Accum/Dist with a chart of the width between upper and lower Bollinger Bands. As you can see the distance is tightening up nicely...improving RSI and TRIX.

I believe we shall have a positive breakout before the week has ended.