How one my most incredible trading error turned out to become one of my most successful trades
I should never have known about Quantum Minerals Corp. if it were not for a review article about another company with a very close name, Quantum Materials Corp. and presented with the acronym QMC, which moved me back in 2016 into an investment decision. I decided to buy shares of the company, went to my trading account, took a rapid glance at the price chart – which was inspiring – and placed a buy order for QMC when the stock price was at $0.055 per share. Few seconds later I then observed that the name displayed for my executed order was “Quantum Minerals Corp.” and realized that the ticker for Quantum Materials Corp. was actually OTCMKTS: QTMM.
Quantum Minerals Corp., a little known junior Lithium mining Company
Instead I had bought shares of Quantum Minerals Corp. , TSX-V: QMC, on the Toronto Stock Exchange while I had enough funds in Canadian Dollar on my account for the order to be executed, a double coincidence indeed.
Then starting to search about the company I could not even find its website which had – and still has – no correct search engine referencing, but finally found out it is a junior lithium mining company, a sector I have been exploring for promising small cap companies due to the robust growth prospective of the electric vehicles and energy storage sectors, now a triple coincidence.
Trading on multiple exchanges
Quantum Minerals Corp. is traded on three different markets:
- Toronto Stock Exchange: TSX-V: QMC
- Frankfurter Boerse: ISIN CA74734C1014 | WKN A1JH3Y | symbol 3LQ
- US Stock Market: OTC PINK: QMCQF
Major breakout from long term foundation
What happened yesterday was that the stock price broke out of the long term foundation above the 2011 price record of CAD 0.35 with a massive volume increase as shown on the QMC monthly price chart. Since there is no overhead resistance it is expected for this breakout to portend a continuation move higher despite the short-term technically ‘overbought’ condition:
Counter-checking the situation of the stock price on Boerse Frankfurt (in $EUR) confirms the effective breakout above the previous price record from 2012 with the decline of the EURCAD exchange rate as the reason for the lower A1JH3Y price peak in 2011 and higher price peak in 2012 compared to QMC.
In the case of QMCQF traded over the counter on the US market the situation is a bit trickier since there is no price history before Week 49 of 2016 (first bar on the left part of the chart):
Should I sell or Should I go
Despite being in massive profits on this position (x7 at the time of writing) I have no intention to sell now despite the short-term technically oversold condition and the risk of a substantial correction to come. Instead the breakout is a compelling long term buy signal but due to the size of my position I do not have the intention to add to it, just to let it run longer term. Time will tell if this will have been a good decision.
Strategy for new entrants
- If there is chance for a set-back place a buy order as close as possible to the breakout price, i.e. 0.35 in case of TSX-V: QMC
- Stop-loss position to be decided at the earliest by the end of the week depending on the price action in the coming three days.
- No price target can be defined yet since there is no overhead resistance.