Monday , 24 June 2019

8 Top Diamond Stocks & Their Chart Setup for 2019, 2020 and Beyond

Diamond stocks [have been] bad performers in recent years…[but] the tide may [finally] be turning…The top diamond stocks outlined in this article show a great chart setup for 2019, 2020 and beyond.

…The list of diamond mines is…long…[so] we focus here on the top 8 diamond stocks…[that best] reflect the state of the industry…

1. Rio Tinto (ASX: RIO)

Rio Tinto is listed in America, Australia, Switzerland, UK and Germany. We take a look at the chart from Australia.

  • The monthly line chart of Rio Tinto shows a huge consolidation of cup shape since the 2008 top, price looks set to challenge ~ 118 price zone again.
  • This is a very enticing chart setup, a typical rounding bull flag formation in the context of a long term rising channel. This suggests a bullish outcome provided the rounding formation is not broken to the downside.

top diamond stock rio tinto

2. Lucapa Diamond Company Ltd. (ASX: LOM) 

Lucapa Diamond Company Ltd. is an emerging global diamond group with high-quality mines in Angola and Lesotho, along with exploration projects in Angola, Australia and Botswana.

  • Lucapa Diamond monthly chart illustrates a gigantic consolidation triangle where price is near the tip of triangle and a big decision has to be made soon.
  • Given the potential bullish sentiment with massive support region, we prefer to take the bullish stance and subsequently breaking…above the downtrend line unless price breaks below the support zone.

top diamond stock lucapa diamond

3. Sarine Technologies (SGX: U77)

Sarine Technologies is the worldwide leader in the development and manufacturing of advanced systems for diamond technologies and gemstone production.

  • The monthly chart of U77 looked ugly after its 2014 top…[and] is still officially in downtrend with no sign of reversal.
  • The price has approached the channel support and major horizontal support [and] these dual support areas could play an important role on how it develops in near future.

top diamond stock sarine technologies

4. Alrosa PJSC (MCX: Alrosa)

A state-owned corporation listed in Moscow stock exchange, one of the largest diamond mining companies that specializes in exploration, mining, manufacture, and sale of diamonds. The company leads the world in diamond mining by volume. Mining takes place in Western Yakutia, the Arkhangelsk region, and Africa.

  • The monthly chart of Alrosa shows an ascending triangle pattern.
  • Prices might challenge the resistance zone again for the fourth time [and] breaking above will mean mid-long term bullish outlook which is in line with what we expect…

top diamond stock Alrosa

5. Five Star Diamonds (CVE: STAR)

Five Star Diamonds, formerly Turquoise Capital Corp., is a Brazilian diamond producer focused on the acquisition and development of advanced stage projects in Brazil. The company owns 23 kimberlite projects in the country, comprising 72 fully-owned exploration licenses and covering a total area of 123,667ha… Five Star Diamonds also owns four diamond processing plants in Brazil. Its headquarters are located in Rio de Janeiro.

  • The stock price of this top diamond stock has been volatile after hitting major support zone. For confirmation, investors might want to wait for price to break downtrend line convincingly before considering position.

top diamond stock Five Star Diamonds

6. Lucara Diamond Corp. (TSX: LUC)

Lucara Diamond Corp. is a diamond exploration and mining company, operating in southern Africa but established in Canada.

  • Since the price plunged from its major top in July 2007 of $8 to $0.21 cents it was able to get back to $4. After this it retraced to $1.70.
  • Visibly, $1.40 is an important price zone where horizontal and uptrend line support coincide…

top diamond stock Lucara Diamond

7. Petra Diamonds Ltd. (LON: PDL) 

Petra Diamonds Ltd. is a diamond mining group headquartered in Jersey. It has a diversified portfolio, with interests in eight producing mines in South Africa and Tanzania and an exploration programme in Botswana.

  • The monthly chart of Petra Diamonds keeps making lower lows. It doesn’t look good at all but price came to temporary halt on what seems to be a major support zone.
  • We expect some volatility before price moves up. We do not rule out a temporary fake down before going up too.

top diamond stock Petra Diamonds

8. Mountain Province Diamonds Inc. (TSE: MPDV) 

Mountain Province Diamonds Inc. is major partner with De Beers in the Gahcho Kue Diamond Mine Project in the Northwest Territories. Gahcho Kué is the world’s largest and richest new diamond mine, with an estimated reserve of 80 million carats.

  • The monthly chart of MPDV looks really bad with no sign of bottom (yet). Presumably, its price will reverse when market sentiment hits rock bottom.
  • We are not saying price will reverse for sure, but given that price has hit the upward channel lower support means there is a potential support coming soon.

top diamond stock MPDV

Conclusions

Judging from the above 8 diamond stocks from various countries only Rio Tinto stands out among them with a strong uptrend.

We are fully aware of the currency effect having influenced diamond prices. As a general rule of thumb we deem diamonds (part of the mining business) to be U.S. dollar sensitive. The lower the USD falls the better for diamond mining companies.

InvestingHaven’s team sees a potential bottoming formation in diamond stocks…[and that] looks very enticing for the long term. We must see confirmations of these major bottoms first, before going all in on the diamond stock sector. It is an absolutely mandatory pre-requisite. Anticipating a bottom is not a sign of investing wisdom.

Editor’s Note: The above excerpts* from the original article have been edited ([ ]) and abridged (…) for the sake of clarity and brevity. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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(*The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)