February 1st, 2021 | 07:40 CET
K+S, Osino Resources, McDonald's: Where patience pays off
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"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
K+S: Everything is in order here
The K+S share experienced its heyday during the last commodity boom and was even catapulted into the DAX. The fertilizer specialist benefited above all from demographic factors. More and more people need to be supplied, and in addition, there is a growing demand for biofuels, which was the thinking of many investors more than fifteen years ago. Today, the situation is similar. Central banks and governments are again working to create an inflationary environment that could drive commodity prices. Although biofuels no longer play a role today, the price of K+S in recent months has already shown the beginnings of where the journey could lead over the next few years.
If one looks at K+S in the long-term chart, one could assume an end to the multi-year downward trend. After a dynamic breakout movement, the value is now consolidating and moving towards the breakout level of around EUR 9. If the value turns upwards again in this area, this would confirm the breakout and the positive chart picture would immediately catch the eye of even more investors. Now that K+S has been able to sell its US business, it also has more room to breathe fundamentally. Although the share has been a loser in recent weeks, the long-term picture remains promising. Every further drop in the share price makes K+S cheaper. However, the share should find a bottom between EUR 8 and EUR 9.
Osino Resources: Gold explorer on fertile ground
The Osino Resources share has already reached a bottom around the CAD 1.25 or EUR 0.80 mark. The paper of the Canadian precious metals Company has been trending sideways at this mark for weeks. Osino Resources operates in politically stable Namibia in the middle of a gold mining area. In the vicinity of Osino is a producing open-pit mine, which shines with high gold grades. Osino has recently explored a similar-sized area, with indications of further deposits beyond that. Only the gold grades currently lag behind the neighboring Otjiko mine. However, Osino recently announced drill results with grades of 1.75 g/t and 1.74 g/t, which are quite competitive.
If Osino Resources manages to confirm these grades, the share could develop further potential. The neighboring project shows that open-pit mining is possible in this area. It is not unlikely that Osino's Twin Hills property's geology is similar to the Otjiko mine geology, some 80km away. Moreover, since Namibia is considered a safe mining location and mining is highly valued in the country, the current price level at Osino Resources could be fertile ground for long-term investments.
McDonald's: Something heavy in the stomach here
The McDonald's stock is also considered a long-term investment by many investors. However, things are not looking so good at the moment for the burger griller, which has increasingly followed the spirit of the times in recent years and even offers vegan alternatives. Thanks to its drive-thru counters, the Company is weathering the crisis well and is undoubtedly benefiting from the trend toward ordering food at home. Added to this is the strong brand and the many restaurants in prime locations around the world. But the share price is weakening. Over a period of one year, the stock has lost around 12% and has failed to break through the EUR 200 mark three times in three years.
In line with the old stock market adage "what doesn't rise will fall," the share is currently preparing to correct in the direction of EUR 160. The share price has found support there several times in recent months. However, if things go badly for McDonald's, prices of EUR 140 could also be possible in the short term. Below this level, the long-term upward trend would even start to falter. While K+S and McDonald's have not yet found their bottom, Osino Resources seems to be trading in safe waters again after a correction. Instead of buying into the correction, investors make sense in waiting for a bottoming out. Even when essential support zones in the chart are reached, the stock does not immediately jump back up. Investors can take their time with an entry and do not have to chase the price. This is a major advantage over many hype stocks.
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