I did a blog on Constitution Mining Corporation (CMIN) on November 19th, 2009 and came out strong that I really liked it. (Click on this link to read) It liked me right back! the stock which I alerted members to at $1.19 traded sideways for only a few days before beginning a strong bullish climb climaxing in a high price of $1.77.

CMIN is a gold exploration company with operations in Peru (and have an LOI on fields in Nevada).  I highly recommend that readers go back and read my previous blog, but here is a short description of the company:

“CMIN has 2 gold fields (in their case the Gold Sands Region of Northeastern Peru) that, according to the company, has proven reserves of over 72 MILLION ounces.  They are busy “proving out” these claims and, while they have no current revenue, are hoping to be a producing gold mining company in 2010.”

I had said in my previous blog that “what sets CMIN apart is that investors are backing them whenever they need money….and, that is all the time.”   For today’s blog, that is the good news and the bad news.  It appears that investors from a previous round of financing were selling off a large number of shares, exercising warrants…that kind of thing.  With that round being priced at 35 cents who can blame them.  I’ll take a quadruple any day of the week!

What it did to the stock price was predictable.  CMIN tanked!  The sellers drove the price down by over 40%.  The underlying company hasn’t changed nor has any adverse news been released.  In my opinion, it was strictly the selling pressure that drove it down.  I am bullish on CMIN and will probably trade this one in my own account.

Here is the chart on CMIN and you can see what I mean.

I never call a bottom, but I think that it might be coming soon.  There is support for the stock in the $1.15 – $1.20 range.  If it can regain that level, then I think that is a good entry point.  The stock is oversold so that will be acting to drive the price higher.  If the MACD continues to be strongly bearish, then look for it to fall further.

However, I think this is a stock that bears watching. It is a gold play with proven reserves that is almost a year away from showing revenue (first revenues are estimated for the 4thQ of 2010 – with moderate production in the 1stQ of 2011).  That doesn’t keep me away at all.  The stock has shown some historical volatility that we short-term traders like.

Do your DD on this one.  Read my last blog, too.  CMIN could be a real nice bounce play.

Good luck and good trading,

Jeffrey Dean

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