Banro Corp. fka BAA

[investorwisdom]

BANRO COMPLETES STEP 1

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Well, we're halfway there. A week ago I explained why junior gold explorer Banro Corporation (NYSEMKT:BAA) was worth putting on your watchlist. Though it didn't do much in the meantime (and in particular didn't move past the technical milestones I figured would be a bullish catalyst), things are finally moving in a positive way for BAA today, and you've got the SPDR Gold Trust ETF (NYSEARCA:GLD) to thank for it.

Just as a quick recap, the higher the price of gold moves, the more profitable it is to be in the mining business. [I know it's obvious - hang with me here.] Thing is, the premise of the idea can cause significant undertows - for better and worse - in the way traders view gold and gold mining stocks. All it would take is the right nudge for gold, and a little explorer like Banro could dole out explosive gains, even if only temporarily.

Now, care to guess what's broken above a key ceiling today and as such is poised to keep rolling? The market's most liquid proxy for gold and gold futures... the SPDR Gold Trust ETF. GLD had been trapped under resistance around $133.30 all week long, which was bolstered by the resistance at the 100-day moving average line (gray) at the same time. The SPDR Gold Trust fund blasted past the ceiling today though, and now that it has, it has plenty of room and momentum to keep going.

Given that GLD did it, you'd think BAA had done something equally technically impressive. You'd be wrong though. What Banro Corporation shares have done this week has been impressive, but not equally impressive. On the other hand, what we've seen so far from BAA has been impressive enough. Indeed, the fact that Banro hasn't taken off yet may actually be to our advantage in that it mean you can still wade in at a good price.

You may recall that that 100-day moving average line was also nagging Banro Corporation the last time I looked (last Friday). Sure enough, like GLD, BAA has cleared that line today. That's a huge step. One hurdle remains, however - the longer-term resistance line (red) currently at $1.13. The stock tested it today, and then pulled back.



While the 'safe' move here is to wait for Banro shares to move above that resistance line, it may be an unnecessary caution that leaves money on the table. Today's bullish volume is strong, and the technical progress is significant. And, as the SCN newsletter from yesterday correctly pointed out, gold was destined to break above this week's ceiling. Now that it has, the SmallCap Network analytical team projects a pretty good move, to $1476. That's gives BAA plenty of room and reason to make big progress from here.