September Charts, page-310

Hi all,
It's DoN again having another crack at tomorrow trading pattern.

Today's opening was pretty much as I expected where the SP briefly crossed 50c and quickly slammed down. However I didn't anticipate the strong rebounce which saw the SP hovered around the 48.5c mark and closed at green today.

The volume on ASX today is around 15 mil vs 23 mil from yesterday which is still quite significant, however the SP traded in a tighter range. It can be either viewed as strong support or strong resistance. I would preferably lean toward the latter because:

1. Buy vs Sell depth ratio reduced from 5:1 yesterday to around 3:1 and at some point even closer to 2:1. This means more sellers coming out today.
2. From below Hourly Chart, RSI and W%R shows some sign of reversing down from their overbought positions. This could mean a start of profit taking / correction.
3. The Boilinger Band shows early sign of convergence from yesterday massive divergence. The last time Boil Band has such big movement was when the SP hits 31c mark and quickly returned to 38c as shown in the Hourly Chart below.
4. Yesterday took 23 mil shares to move the SP from 42.5c to 49.5c. Today it took 15 mil shares to move SP from 47.5c to close of 49.5. Across the board all other Li players had another massive day which means PLS was supposed to follow however it didn't. This can be viewed as strong selling capping the price.

Tomorrow morning I would anticipate another try at 50c mark. If it fails like it did today, i would expect the SP to retreat a bit further - maybe hit 46.5c support and close in red.

I personally hope it can just cut through the 50c line like butter and carry on toward 60c however i remain doubtful.