Radisson Mining Resources (TSXV: RDS) - Swing Trade💰 — Mean Reversion Washout (RSI 2 Extreme)
🏢 Company & Catalyst
Snapshot: Radisson Mining Resources (TSXV: RDS) is a gold exploration company focused on advancing the high-grade O’Brien Gold Project in Quebec’s Abitibi Greenstone Belt.
Why Now: The stock has suffered a capitulation-style flush (-11% on the daily candle), driving technicals to an extreme statistical deviation. This presents a classic "buying fear" opportunity rather than a fundamental change in thesis.
📊 Fundamental & Sector Fit
Valuation/Health: As a junior explorer, RDS trades on drill potential and gold sentiment. The O'Brien project holds high-grade historic production data, providing a tangible floor value during speculative washouts.
Sector Velocity: Junior miners (GDXJ) often act as a leveraged beta to Gold. When the broad sector corrects, juniors like RDS often overshoot to the downside due to lower liquidity, creating deep value pockets for swing traders.
Thesis Tie-in: The sharp disconnect between the core asset value (O'Brien Project) and the immediate price drop (likely liquidity-driven) supports a technical bounce back to the mean.
📐 Technical Structure (The "Why")
Primary Setup: Oversold Mean Reversion (RSI 2). The strategy identifies assets that have stretched too far like a rubber band and are statistically probable to snap back.
Trend Context: Price has aggressively pulled back below the 50 SMA (Blue) and 20 EMA (Orange), entering a "value zone" defined by previous structural support.
Key Indicator Signal:
RSI(2): Currently at 2.74. Readings below 10 are rare; readings below 5 represent extreme capitulation.
Volume: The setup candle shows a volume spike, indicating a "clearing out" of weak hands (surrender).
Key Levels:
Support: 0.62 – 0.70 (Current low and psychological round number).
Resistance: 0.79 – 0.86 (The 20 EMA and recent breakdown level).
🎯 Execution Plan
Entry Zone: 0.70 – 0.72 (Look for an entry near the close of the washout candle or a limit order just below current price).
Stop Loss: 0.62 (Hard stop below the volatility band/recent swing low to invalidate the setup if the flush continues).
Take Profit: 0.86 (Reversion target near the blue SMA line).
Risk/Reward: 2.0 R (Risking ~$0.08 to make ~$0.16).
🧠 Analyst's Bias
The violence of this sell-off (-11%) combined with an RSI(2) of 2.74 suggests a liquidity event rather than a structural failure. We are fading the panic to catch the mechanical snap-back as algos cover shorts and value buyers step in.
