Daily 16 Sep.
The daily has had a great run & has clearly broken the s/t downtrend.
There are signs however that it is becoming overbought, at least on the daily & in the s/t
The high last week reached the prev high at 56.5 – 57 but failed to follow up on Frid & made a lower high despite the very high volume.
That is reflected by the Histogram making a lower bar, so is effectively showing a divergence.
Frid Vol was obviously related to fund buying & may see more in the coming week, but I would still expect to see the usual patterns repeat despite being added to the ASX 300 & a retrace before we move higher once production begins in earnest.
The 38% level down at 47.5 - 48 would be the first target & also initial support.
That 48 level was the high back in 2018 & has been a significant support / resistance level since April.
Further support is down around 44 - 46 & the trend breakout point area is also the 50 – 62% Fib level.
Resistance is 57 – 59. Beyond that & we have 59 – 63.
My target for this breakout / rerate was 57 – 58 so a pullback now would not be unexpected.
Fundamentals & near-term production should hold the sp up & any retrace should be short lived but now we have funds on board the game will likely change. One hopes it is for the better.
Of course the buying may continue & we have another 10 days of big green candles.
There are many price changing announcements to come in the near term.
Life changing times ahead for many.
Weekly
Last weeks projected target up to 57 – 58 was reached. The prev high (in April) was also reached & the sp closed just below that & just below last week’s high at 0.555. It looks quite bullish & similar to the prev week.
The indicators are still bullish looking so I would expect that the high will be tested early in the week with the possibility of a third large green candle forming.
However, there will be, or at least there should be, a retracement at some stage to retest the prev resistance levels at some stage.
The first of these is 52 then further down at 48 & lower down again at 44.5 - 46. Both of those are previously significant price points.
Short activity last week increased substantially with the loaned shares increasing from 2 mill to over 13 million & is possibly Fund related for the future.
Some may say that is irrelevant as the open positions are still low & the reported daily numbers were below normal but I don’t believe that the pros would borrow almost 14 million shares to short & not use them. I do believe that they are lax in reporting their use though which means they may not show up in the reports.
If they have not used them yet then I expect them too very soon. How they use them remains to be seen.
Once production starts next month, that will signify the end of the main construction stage of the 2k
tpa plant & the markets focus will be on other things such as the 10,000 tpa expansion & off-take agreements to name just a few.
Any retracements now will be the final chances for a cheaper entry imo.
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