One of the key advantages of being a Barchart Premier member is full and unfiltered access to the platform’s screener. With this data interface, you can use the myriad filters — which seek out compelling securities that meet specific parameters — as a starting point for obtaining your own investing ideas. Even better, you can occasionally come across a hidden gem that few experts talk about.
One of my favorite Barchart Screeners is the J-Pattern or often referred to as the J-Hook. According to the investment resource, the pattern “is formed as part of up-trending price action that takes a little dip before resuming the trend.” To put it simply, the formation is similar to other bullish signals, such as the pennant or flag:
- The J-Hook begins with an initial rally.
- A pullback occurs, where the price action noticeably declines.
- In the third phase, the uptrend resumes.
- In some J-Hooks, there could be another mild pullback before a more decisive swing higher.
Primarily, the main difference between the J-Pattern family of pricing behaviors versus a bullish flag or pennant formation is in the second phase. With flags/pennants, the second phase represents more of a sideways consolidation. With the J-Hook, you’re often seeing a price decline, not just consolidation.
Still, the end theme is practically the same: investors are digesting an earlier rally before committing to another big run. Therefore, front-running the J-Hook could be a lucrative idea.
In this case, Barchart’s algorithm has identified gold producer Aris Mining (ARMN) as a prospective bullish candidate. ARMN stock popped sharply higher on Thursday after the underlying company released some encouraging financial results for its fourth quarter. Specifically, Aris achieved its highest quarterly gold production in 2024, hitting 57,364 ounces. It also delivered $22 million of net income and $67 million of EBITDA.
Combined with supportive fundamentals — particularly the fear trade — ARMN stock deserves to be on your radar.
ARMN Stock Offers Solid Value Despite Recent Surge
With buy low, sell high having become the unofficial mantra of Wall Street, it’s understandable that retail investors may not be gung-ho about ARMN stock at this juncture. Let’s face it — the equity skyrocketed nearly 19% on Thursday, which doesn’t scream “discount.” Further, the afterhours session has been volatile, with ARMN down more than 3%.
Nevertheless, on a fundamental level, ARMN stock still appears enticing. The few analysts who are covering Aris believe that fiscal 2025 sales will reach $705.3 million, up 38.13% from last year’s result. In fiscal 2026, experts anticipate a top-line print of $1.22 billion, up 72.36% from projected 2025 revenue.
At the moment, ARMN stock trades at 1.25X trailing-12-month (TTM) sales. However, based on next year’s revenue, ARMN is currently trading at a 0.93X multiple. Around this time last year, the equity exchanged hands at 1.1X sales. Granted, that’s not much of a gap but there’s still room to run.
Further, based on a discounted cash flow model, Simply Wall St projected that the fair value estimate for ARMN stock is 9.48 CAD. Using current exchange rates, this metric translates to around $6.57 per share. That’s nearly two bucks higher from where ARMN landed on Thursday.
If this assessment turns out to be accurate, Aris Mining has significant room to run before fading out. Such a prospect makes its inclusion as a J-Hook candidate quite alluring.
Between late February and early March, ARMN stock swung higher before pulling back. However, the post-earnings move firmly broke through prior ceilings, triggering Barchart’s J-Hook algorithm. While there could be some choppiness over the next few sessions, I’d expect the next logical target is for the bulls to take control of the $5 level.
From there, I can easily see a case where ARMN stock exceeds the apparent fair value price of $6.57 per share. That’s because the fear trade — one of the cynical catalysts for gold — is in full bloom.
Statistical Trends Also Smile on Aris Mining
Finally, there’s another reason to consider ARMN stock as a speculative investment and that’s the statistical backdrop. As a highly speculative entity, you wouldn’t expect much out of Aris and you’d be right to be skeptical. Using pricing data since January 2019, ARMN carries a slightly negative bias.
Specifically, a long position held for any given eight-week period has a 49.68% chance of rising. During this time, the third week features the highest odds of success at just over 52%. No matter how you cut it, the risk-reward profile has been rather poor.
However, under dynamic conditions — specifically when ARMN stock rises between 10% and 20% in a one-week period — the subsequent eight-week long position has a 65.38% chance of being profitable. The catch is that the early weeks tend to be shaky, favoring the bears. Over time, however, the bulls buttress the price action, sending ARMN higher.
At this moment, Aris Mining is only available in the open market, making near-term trading a difficult proposition. However, if you’re interested in a set-it-and-forget-it type of speculative idea, ARMN stock should be on your radar.
