The call here previously with relation to how much Greatland Gold might retrace after its blow off run of late was a guess in the 1p – 1.25p. The may have sounded painful and perhaps a little harsh, but in the cruel world of small caps it is better to be cruel in order to be kind. This allows those who have been on the right side of a stock to deploy their cash most efficiently, and of course allows those who have yet to get on board not to overpay.
The latest configuration here on the daily chart shows how the stock is currently standing just below the last two intraday support points at 1.60p. An end of day close back below this – a weekly close for the cautious, would suggest a fresh move down to the former 1.08p intraday low from the start of October. This is where the 1p – 1.25p support zone was derived, and ties in with the rising 50 day moving average rising towards 1p. Those who wish to play the momentum game here though, would wait for an end of day close back above the 10 day moving average at 1.93p, but at the moment it does look as though the best way forward here would be to buy on dips towards 1p. The big picture target here as stated before is expected to be 3.5p on a 3-4 months timeframe.
Clearly, we are rather low on historical data here for Reabold Resources. However, there is enough on the daily chart to allow us to draw a rising trend channel in place since September. Rather conveniently, the floor of the channel currently ties in with the present position of the 50 and 200 day moving averages at 0.71p. The technical message at the moment is that provided the shares remain above the 50 day / 200 day lines, we should be treated to a journey over the next 2-3 months towards the 2017 price channel top at 1.3p.
2017 has been the year that Thor Mining shares finally hit the high notes, although the pullback from the February / March spike was somewhat disappointing. However, it could be classed as a positive retracement, as since then we have seen the 200 day moving average now at 0.94p rising throughout. This is a symptom of a stock in full bull mode, something which makes the fresh takeoff over the past month all the more understandable. Indeed, the trigger for the latest rise was a technical one, the “Zak Mir Cross” where the 50 day moving average crosses below a rising 200 day line. This cross often accompanies the strongest of rallies, and it is to be hoped that we are seeing such a phenomenon now. The favoured upside scenario over the next 2-3 months is the top of the 2016 price channel at 2p. Only sustained price action back below the post May resistance in the 1.10p – 1.20p zone would question the ultra bullish outlook.
UK Oil & Gas:
The fear with UK Oil & Gas after its stellar run was that it could have been a flash in the pan – after a double top towards 10p, and a subsequent gap to the downside last month through 6p. However, since then we have seen fresh support come in at former July resistance at 4p, well above the 200 day moving average now at 3.5p. The multiple support points we have been treated to above the 200 day line in recent weeks is an extended bullish signal, something which suggests the overall pattern here since July is a bullish falling wedge pattern. The conclusion on this basis would be that as little as a weekly close for UK Oil & Gas at 6p could be the buy trigger for a return to 10p plus early next year. But as in the case of all technical calls, one should be strict on waiting for the 6p buy trigger to be activated before taking any action.
One of the bona fide criticisms of charting is that one can be flying blind without the fundamental picture, just as it can be said that without market timing as provided by technical analysis, p/e’s and free cash flow can go out the window. This point has been highlighted in a rather painful way as far as Carillion is concerned, and even though there have been some signs of stabilization, this is still a situation which does not look appropriate for widows, orphans or perhaps even most investors. From a charting perspective it can be seen that in recent days the stock has been struggling below the 50 day moving average at 45.75p and the neutral RSI 50 level. Both these features need to be conquered on a weekly close basis in order to snuff out the risk of a “final” dip to the bottom of the July trend channel at 35p. The best on offer above the 50 day line looks to be the low 60p’s at the top of the post summer resistance line.
It may be said that in the case of Ferrexpo we were treated to a rather unfriendly, and rather lengthy pullback from September resistance above 320p, a point underlined by the as yet unfilled gap to the downside through 315p. This is a mild warning to the bulls on the negative side. Nevertheless, the way the shares have just delivered a bear trap rebound from below the former initial October support at 257p does provide a bottom fishing opportunity for aggressive traders, especially so given the way we are looking at a rebound off the main uptrend line from April.
The implication at this time is that at least while above the April line at 252p the “minimum” on the upside here should be as high as the 50 day moving average at 289p over the next 1-2 months. A weekly close above the 50 day line points us back to the top of the 2017 price channel at 350p plus early in 2018.
Although there was an initial false dawn in terms of the July gap through the 50 day moving average shown in blue and now at 81p, the second gap through the line this month was covered here, and has “worked” very well. This is said on the basis that there was no significant pullback or even token attempt to fill the gap higher. This is only seen in the strongest of situations. But there is more. Also not seen except for in the strongest of situations is a first time clearance of the 200 day moving average – now at 93p (in black). This combined with the overall flattened W shaped reversal here on the daily chart over many months suggests that the 160p plus 2017 price channel top target could be hit as soon as the next 3-4 months. Ideally, there is no sustained pullback below the 200 day line in the interim.
Vast “did the business” at the start of the year, by nearly 10 bagging ahead of a golden cross between the 50 day and 200 day moving averages. While we may not quite match this level of excitement by the turn of this year, there is a decent chance ahead and in the aftermath of the current golden cross we could see the stock double. This is especially while the shares remain above the 200 day line at 0.42p, and the RSI now at 60/100 is consistent above neutral 50. The February resistance line projection is already promising a 2-3 months target above 1.10p.
The rumour mill, just for a change, called it quite correctly, both in terms of the timeframe for a deal, and the price on AAAP. This means that those traders who a minded to follow idle, spurious, and non multi sourced and stacked up information, may have journeyed from the mid $60s to the low $80’s now.
That said, you did not have to have the brains of Bertrand Russell in recent to work out that something was going on here in the M&A sense. So one guesses a reasonable number of hedge funds and wealth “managers” may have been on the good ship AAAP.
On the face of it the Novartis offer which amounts to $82 per ADS is a little shy of the rumoured $85, and the structure could be argued by some to leave the door open to rivals of Novartis to consider their own offers. We shall see.
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