Mr q*9
@qqqqqqqqq - if its charts you want its charts you get. You’ll find absolutely no mention of Hammer Mills, Magna CNs, Tailings, or CILs in the following. I wasn’t intending to post any more OGX charts until I could see some sign of a change in trend, but on reviewing the charts I was surprised at how well behaved the OGX SP is from a TA perspective, so I thought I'd share what I have observed. This, well behaved observation, is something I’ve noticed on a significant number of low cap spec stocks that I follow.
The fist chart shown below is a daily WaveTrend chart going back to December 2017. The interesting thing on this chart is that the candle on the day following the Ultra-High Volume breakout candle of 28/12/2017, also formed the Close of the breakout candle on the Weekly chart. The weekly Close and the Low of that candle was 3.6c which was also the recent low of the “spinning top candle” that occurred on 31/08 (the date of the CN announcement). So the 3.6c level seems to be of significance and shouldn’t be ignored. Given that, I would suggest that the support zone that everyone should watch closely is between 3.6c and 4c, the 4c level being the Close of the daily breakout candle of 29/12/2017. The previous chart that I posted on this thread was a weekly chart and I noted that the WaveTrend oscillator was headed down. This indicator is now in the oversold area on the weekly chart (not shown here). The other thing to note on the chart shown below is that the WaveTrend oscillator will stay in the overbought or oversold area when the SP is in a strong trend. This suggests that the current down trend is strong.
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In the chart shown below I have zeroed in to the current SP action from the middle of this year. I have highlighted three recent patterns and the significant support levels and downside SP targets on the chart. Now this is what I mean by “well behaved” from a TA perspective. My comments on this chart are:
- Pattern One – the downward impulse moves are shown by the first two identical brown arrows. The second arrow targeted the 4.3c level which the SP bounced off on 13/08. If this impulse move repeats a third time the target level is 2.6c. If the SP fell to 2.6c it would then close the original breakout gap from back in late December last year.
- Pattern Two – The SP Triangle pattern price targets were 5.2c which was the 48% move target and the lower probability 100% move target which was 4c. The 4c level which is also the level of the Close of the original breakout candle has been met.
- Pattern Three – The SP is currently in a short term downward sloping channel. It could quite easily move down to the 3.6c level and if this level is breached we will all be hoping that the 3.3c level holds, i.e. the top of the original breakaway gap. If not, then the whole concept of the “back to basics” strategy can be relegated to the bottom draw of all those LTH’s that still hold on, or to the garbage bin of those Investors who finally give up.
- The 50 SMA (shown in blue) has now crossed below the 200 SMA (shown in orange). The “old timers” refer to this as a “Death Cross”. I’m not really convinced that this is all that significant for low cap spec stocks. All of the relevant and significant support and possible target levels are shown on the chart.
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My final chart for this post is my OGX Trend-Momentum-Cycle chart (shown below).
My comments/observations are:
- The SP is still in a longer term downward sloping channel. Combined with this the MMAs are confirming that the SP is in a strong down trend, i.e. as shown by the equal separation and slope of the blue “Investor sentiment” moving averages, and the relatively constant separation of the red “Trader sentiment” moving averages from the blue MMAs.
- Momentum (DAD-MOM) is negative, and has been negative since 29/03. It is currently flat but a move of the red MOM below the green DAD would be a signal of a continuation lower.
- All the stochastics (short term cycle indicators) are converging to the zero level. So all these indicators suggest that we have an SP that is on a steady straight decline with little volatility on the daily Close.
- So are there any positives? Yes! The support at the 4c and 3.6c levels are a positive, as long as they continue to hold.
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From a TA perspective when would a new Investor consider going long? Only on a change of trend to up. A possible trend change to up would be signalled by a cross of the SP above the 50 SMA which is also the top of the downward sloping trend channel, currently around the 5.5c to 5.6c level but still falling. This would have to be followed by a cross of the red MMAs above the blue MMAs followed by a bounce of the red off the blue after a short retrace.
From a TA perspective, when would a Trader consider going long? A Trader would look for a base to form on or around a Very-High-Volume Close. For OGX I would be watching for daily volume on the ASX above 32 million shares traded, followed by the SP trading above the Close set by that candle. I would want the WaveTrend oscillator to be moving up out of the oversold area and then for some sort or resistance level to be broken. This resistance level could be the top of the channel or the 50 SMA etc. Any trade would be treated as a short term trade until the trend was confirmed as having changed to up.
The final question is that of; what could change the direction of the SP back to up? TA and charts can’t help you answer this question. The answer lies in the other OGX FA threads. Whether the answer is related to Cascavel production figures, working capital requirements, prospective discoveries through continued exploration, or even a new “Better Than Basics” company strategy that we haven’t seen yet, I don’t know. But I am pretty sure that the chart will let me know when the change in direction to up is in play. From a TA perspective the reason for such a change is irrelevant.
Good luck everyone – Wilf.
