price movements

Hi all,

For those who attach some credibility to reading chicken entrails and other forms of the black art of charting, here, for what it's worth, is my explanation of what the share price has been doing and my rough assessment of what lies ahead in the immediate future. Hopefully, it will align with the assessments of some others.

The first of two clickable charts within this post contains a blue pitchfork with the significant lines labelled. The two pale blue lines mark the 0.618 Fibonacci divisions of its upper and lower channels.

THE STORY SO FAR (see first clickable chart)



I first drew this pitchfork on 9 July after it became obvious that price had made a significant turn upwards from its low on 30 June (marked as P2 on the chart). Notice how price movement has respected the significant lines within this fork, including the 0.618 lines, as either resistance or support levels throughout its movement since then. This is evidenced by the number of exact touches to test/restest those lines as resistance or support levels, or as turning points.

More recently, the rise from a low of 8.0 cents on 27 Sep (marked as 1) to the intra-day high of 14.5 cents on 6 Oct (marked as 2) saw it close on that day at 13 cents, exactly on the 0.618 Fibonacci support line, after making an exact touch on the upper median line parallel of the pitchfork as the limit of its upwards movement. Just coincidence? I stop believing a long time ago that such movements are just
coincidence.

Price then continued back to the median line of the pitchfork (also completing an exact 0.618 Fibonacci retracement) where multiple touches (marked as 3) established this as a strong level of support, before starting its next leg up. Pitchfork theory states that price always attempts to return to the median line and that as it crosses significant lines it tests and retests them as resistance or support, depending on the direction from which it has approached them.

Note that the next move made an exact touch on the 0.618 Fibonacci line from beneath and retested that line as resistance on the following day without managing to penetrate it, as at close of trading on Friday 15 October.

WHAT NEXT? (see second clickable chart)



If you apply a Fibonacci extension to the price movement from 27 Sep to its high on 6 Oct and subsequent retracement on 7 Oct (marked as points 1, 2 and 3) then the intermediate price target becomes 17.0 cents. I believe this goal represents a reasonable probability. Note that this target is based on the continuing patterns of normal buying and selling market pressures and does not anticipate the impacts of any announcements.

COMMENT

In case you were wondering, I choose stocks based on their fundamentals, but I use Technical Analysis to help me identify likely turning points for price and therefore good entry and exit levels. I have some other stocks of mine to re-assess, so I'm off now to buy a few more chickens.

Any comments or opposing views are welcomed. Many heads are better than one, particularly when that one is only mine.

Regards,
Bones

For Nathan - Love your work! Much appreciated.