Medinah Minerals (MDMN)

[Hurricane_Rick]

MDMN Weekly Chart Annotated - and week in review ending 1/10/2010

Fundamental Analysis:

The only fundamental update was the addition of new pictures at LDM on the medinah-minerals.com website, particularly a new picture added after hours on Friday that shows what is assumed to be visible gold though shareholders are only told "new mineralization found during LDM shaft work" according to the picture's caption. The new pictures were obviously not a market-moving event, but they do provide visual indications that work has resumed at LDM and the company is perhaps prepping the website for an update on the LDM front which purportedly will not occur until after the ADL joint venture has been completed.

On the rumor front, shareholders are focusing their attention on the upcoming week for news regarding the ADL joint venture and then the possibility of an LDM update shortly thereafter as mentioned above. Whether or not Les Price has to or will travel to Chile or not during this process is debatable. Obviously if he does leave for Chile that will be a huge indicator of things being set in motion.

Technical Analysis:

Last week the stock closed at .0489 down 2.2% on another lightly trading week of 7 million shares. The low of the week was .042 as the stock continues to trade within a narrow downward channel (in yellow in the chart). The relatively low volume was a disappointment for those (like me) who were expecting some rumor-fueled buying heading into the weekend. It definitely dampens the excitement level of many shareholders with high hopes (and frayed nerves), but the lack of volume hopefully keeps shareholders a bit more cautious as far as expectations are concerned.

The week was signified by yet another doji candle which gives further indication that the bottom of this pullback/correction is near the end. The key characteristic to this doji is that it is a "dragonfly doji" which is generally one of the strongest reversal candles.

Another key signal that occurred in this week's chart is that the stochastics indicator had a crossover of the signal line...both below oversold levels. This marks the 9th time since 2009 that this has occurred. 7 of the previous 8 times led to multi-bagger reversal breakouts.

Finally, I want to call to attention another very reliable bullish reversal chart pattern that is in the making. I mentioned last week about the classic low volume bullish flag formation that has developed . The bullish flag is actually a smaller component of a more significant and reliable bottom reversal pattern called the "1-2-3 pattern" which is signified by 3 key shifts in trend. Referring to the white circles on the annotated chart below, the 1-2-3 pattern is as follows:

1) The bottom point of a significant downtrend. For MDMN this occurred at .0257 in June.
2) The top of the first reactionary bounce. For MDMN this occurred at .0709 in October.
3) The bottom of an attempt to test the recent lows which falls short of the low (i.e. "higher low"). For MDMN this may have occurred this week at .042.

The breakout from the 1-2-3 pattern would be the price breaking the high of the reactionary bounce (point 2) which is .0709. This is a key short-term resistance point that, if broken, could lead to a strong breakout move.

Looking Ahead:

Taking into account the rumors of some sort of near-term positive conclusion to the joint venture negotiation process overlaid with the chart pointing towards a very reliable breakout pattern, we have all the makings of a perfect alignment of fundamentals and technicals. In my opinion (and this is not a recommendation), given all the factors currently at play, this is a prime time to take or add to a position and do so with a fairly high degree of confidence in a potentially strong upward move.