Its been a while since I've seen any charting commentary on the Galena threads so thought I'd throw in some of my own to wake up the TA guys in here.
History may not always accurately predict the future but I find seeing as the same money controls the same stocks it usually serves as a pretty good indicator for what comes next. And if history is anything to go by on G1A then holders have some very good times ahead in the not too distant future...
Was around this time last year when things really started to spice up. The fundamentals seemed to be there and investors knew something big was on the horizon yet the sp all of the sudden dropped through support to leave everyone scratching their heads.
Then a matter of only weeks later G1A came through with a company-making ann. Toho threw $90M at the company and the sp gained nearly 50% in a day. This jump sparked a rally that lasted months and had G1A deliver multiple bags from the pushdown in December '18.
Fast forward a year from that pushdown and here we are again. The project has kept improving and is more derisked than ever yet the sp has been on a slow decline and more recently has dropped through support. Once again holders are left scratching their heads...
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Well if you've done your research then you'd know G1A must be in one of the strongest fundamental positions of almost any junior on the ASX. With some major ann's that will add more value and further derisk the project due very soon. So that alone should let you rest easy each night.
If we then switch over to the TA side of things then I think you'll agree, things are starting to shape up very well also...
First, lets look back to what happened this time last year before the Toho ann and see if you can see any similarities.
To keep it simple I've included the
weekly chart below.
You'll see on the weekly that around 4 weeks before the major ann G1A had a shakeout before the floodgates well and truly opened.
More recently G1A has had another shakeout dropping through support and we are now 2 weeks after the peak of that pushdown and the sp is once again climbing back towards its old support levels.
Considering the company has given guidance that it is looking to have finance locked in by January, a resource upgrade in the mix and also US/China relations are set to flourish in the next couple of weeks it certainly looks as though we may just have a similar timeline on the next leg up...
But why would the sp drop if the company is in a stronger position?Shakeouts are a normal part of sp runs and happen to be a really good lead indicator that a bull run is coming.
To quote Tom Williams from
The Undeclared Secrets That Drive The Stock MarketA shakeout 'is engineered to create panic selling and to catch stops, thus helping the final onslaught to transfer stock back to professional traders. You would expect higher prices after this event.'
The stock market is a game of patience and those in the know will always play on this. They will manipulate prices to scare or even bore people out of their holdings. They will make it seem as if the sky is falling, then just as quick put a rocket under the sp as if its going to the moon...
Lets go into a little more detail on the daily chart below then we can see some pretty significant indicators that are all starting to point in the right direction.
As seen on both the weekly and daily charts the sp moved in a range for many months with a very solid support underneath (highlighted by the green lines). Toward the end of the supported range we have a pretty text book terminal shakeout to grab any loose shares from weak hands or impatient holders. You'll note that the volume on the days with the biggest pushdowns were some of the lightest on the charts - showing that they'd already tested demand and once they had minimal resistance they dropped the sp to its lowest levels to grab what they could with the scare tactics.
Also, if we look at the bottom of both pushdown areas you will see the momentum indicators ALL showing signs that the sp was WAY OVERSOLD and all crossed up at those same levels.
The RSI has a couple of real giveaways. You will notice that this indicator only retreated to the oversold area twice in the whole 18mth period shown - both of these were when the pushdowns peaked.
What you'll also notice on the RSI is ever since the initial spike from the 20's to the 30's this indicator has been on a slow decline and has not been able to break out of that trend all year...
That is up until now...
The RSI has just broken the trend and is now firmly pointed upwards.
Does this mean G1A is guaranteed to jump to new highs and deliver multiple bags in the next few weeks?
Hell no!!!
Its the stock market, there are no guarantees and theres certainly some negatives that could cause set backs so its paramount you are prepared for those if you plan on trading G1A.
The sp has multiple gaps in the 20's that may prove magnetic if no news comes soon. As G1A is a very tightly held register and reasonably thinly traded stock it is definitely at the mercy of any manipulators should they wish to try one last pushdown.
The flip side of tight registers is once the sp starts running then you'll need a seatbelt cause it'll move high and it'll move fast!!!
As I stated initially, you cannot rely on history to accurately predict the future but when the same money controls the same sp it is a pretty decent indicator of whats ahead...
Fundamentally I believe G1A is as strong as any junior you will ever see. Add the current TA set up to that equation and there is a decent weight of evidence to support a strong case for a very good year ahead for all holders...
AIMHO
DYOR
GLTAH
