Thought I'd put up a chart analysis update. Below are the previous charts I posted leading up to that last breakout from 1.2c to 2c
Link to last post: https://hotcopper.com.au/posts/69903770/single
Before the Harmonic Bullish Butterfly pattern was completed, there was the Cup and Handle with the Cup completed and the Handle ready to breakout.
I posted about that on the 1/09/23 here: https://hotcopper.com.au/threads/chart.7420798/page-52?post_id=69687181As a rule of thumb if it's above the 50MA it's bullish, below it's bearish...closing above after rejecting below is quite bullish.Still needs to confirm tomorrow and rest of the week but today will look like a bear trap come next week.Yesterday was what we wanted to see, low volume with no selling pressure and today increased volume with the share price moving up is confirming that drop was a bear trap and in hindsight quite an orchestrated move.
To answer your question Jimmy, yeah there is a Cup and Handle formed, the Cup has fully completed with the handle now playing out.
Based on the Cup and Handle, the share price target is 2.1c as it's measured by the depth of the cup (0.009) and from the top point of the handle end (1.4c)
Needs to break that 1.4c wall but its nothing that we haven't seen done, but once that does it should confirm the complete breakout of the C&H.
above: my chart from last Friday noting the coming breakout with 1.7c as the first target.
New high today with 1.9c and a new high close since the acquisition of the lithium projects and rare earth projects.
The C&H target as noted from my previous post above, is 2.1c and today smashed through the first target of the Butterfly breakout target of 1.7c and the second target being the 161.8% of Point C&D gives the same price target as the Cup and Handle of 2.1c which is a positive when two different patterns provide the same target result.
Volume substantially increased today with 81.1m traded last Friday and 212.9m traded today, confirming the breakout for a second day.
Broke through multiple resistance levels of 1.5c, 1.6c and 1.7c strongly with volume to close at a new high of 1.9c but may see a potential backtest of those resistance levels as they now become the new support bases, but with news due in October a few weeks away that may not occur but RR1 has had a habit of these backtests and attempted bear traps with two so far occuring.
The assays due will be the catalyst and a big turning point for RR1, if the results come back similar to those of Delta given the continuous geology then the 2.1c target will be a thing of the past. Charts provide a short term guidance but fundamentals is where the money is made.
Let's see how the rest of the week goes.
Updated Chart as of today (18.10.23)
The chart below I've outlined the 'Accumulation Boxes', these have been the support areas between 0.009 to 1.2c in the first 'Accumulation Box', before a price rise up to 1.5c and forming a second 'Accumulation Box' with both boxes experiencing a confirmed 'Bear Trap' towards.
The 'Bear Trap' is circled on the chart, this is where the price has dropped below the 50-day-MA (yellow line) rejected lower prices and bounced back, moving above the 50-day-MA.
This happened twice already and currently RR1 is potentially experiencing a third 'Bear Trap' after the last 'Distribution' phase where the share price brokeout but couldn't sustain the higher prices as global Macro-events impacted all areas of the market, including the Lithium sector experiencing a bearish period.
Currently the share price has rejected the lower 1.05c and 1.1c levels with strong support coming through to push back up to the 1.2-1.3c trading level, with volume low and reducining together with the MACD bottoming and starting to turn up, indicating that sellers are being exhausted and buyers will need to step up.
If the overall lithium sector can continue to remain stable and rise, as well as overall markets then the third 'Accumulation Box' should continue with 1.4c in sight, from which a breakout aligns with the MACD turning up and news due.
The MACD currently is in the prime position where one would want it to be to enter a stock as it's in negative territory or as I call it the "valley" and not at the Top/'top of the hill' which can be seen where the share price has risen and then dropped back. This is where you get people saying "why do I always buy the top?", it's staring at you in plain sight on the chart.
Can see where the first 'Distribution' level the MACD was significantly higher, it drops off, levels out between the first and second 'Accumulation Boxes', pullsback and then rises again with the share price breakout to 2c; except here as I've drawn (white line) from the first Top of the MACD to the second Top, you have a negative MACD divergence, where the share price has risen higher the second time but the MACD is lower than the first price rise, meaning it's overshot and likely won't sustain (sometimes they do if there is significant news and it keeps runing and forms a new pattern, but in this case the breakout wasn't on significant enough news, taking into factor the Market Cap value as well in conjunction with the news.)
The chart is merely a visual representation of the market participants and with the right understanding can be used to see what is happening within an individual stock and what the behaviour of the buyers & sellers are that can indicate the current trajectory of the share price.
Positive news from the upcoming assays will be needed to see a new high reached but a breakout to the 1.5-1.8c level may come in the lead up to news if as mentioned, overall markets especially the lithium sector can remain calm and positive.
(20min delay)