After Bauxite Resources Ltd came out of a Trading Halt Oct 22nd 2015 on the back of a price sensitive announcement re a MOU, there was strong demand for the company’s shares which rose around 30%. Following this breakout, the share price then retracted as some shorter term profit takers took advantage of that sharp rise. Supply at that time came into the market however buyers seemed content with buying up what was thrown at them. This buying activity resulted in the creation of a strong support zone around the early 8 cents mark.
Moving into the New Year and trading volumes started to pick up, however resistance to higher prices did appear in the late 8’s cent to 9c. Early Feb was strong month, with trading volumes picking up and all available supply quietly accumulated. This is significant as there is only around 40% of the free float available to retailers. 6 April SP crossed lower BB; 19 April 10 day SMA crossed 25 day SMA. Finally resistance in the early 9cents was broken through on 13 April on reasonable but not excessive volume. After a sustained and deliberate period of accumulation, BAU looks like it might be ready to have an upward run. With shorter term moving averages being crossed and hungry buyers appearing happy to take on the sellers head to head, higher prices seems a possibility in the shorter term.
Weekly Chart - Steady gains in SP since October 2015
Daily Chart - Clearly accumulation since October 2015
