Happy new year.
Well that was an interesting end to the year. Not what we wanted to see at all but it looks as though the sell off is done with & we could now settle into a trading range until the OT is sorted.
Accumulation.
The new trading range (13) at this stage looks like 12.5 – 15.5 but may change depending on the whims of the markets both here and overseas.
Currently it appears as though the end result of the manipulations (apart from forcing the sp down) was to see another 11 million odd shares accumulated at an avg. price of 13.5 with more than half of them at 12.5.
That is 2.1% of available shares and would be held in multiple accounts by traders & others.
During the sell down out of range 12, there were roughly 38 million traded.
That is only 7% of the available shares and hardly qualifies as a panic sell off.
Clearly the general market is across the situation, knows what is coming & is holding.
The chart does appear to show a capitulation though as evidenced by the large spike in volume & the long tail on the 21/12 bar as the sp reached & (so far) rejected the lows.
Daily.
Positives (depending on which daily chart I am looking at.)
The stoch 5 is in the bullish zone above 50. The stoch 14 is rising& is at 50.
The MACD has turned up & has almost returned to the sig line. The histogram is also rising & is just below zero.
The sp has crossed over the short term down trending line Short term support is 13.5
Negatives.
There is an unclosed gap at 13.5 – 14.
The Stoch’s are returning (down) to their sig lines. It is normal to see a reversal / pause at the O/B or 50 line as the sp rallies & this often indicating a pause or reversal in the current trend.
The MACD is still below the sig line & the Histogram is below zero.
The volume for the last three bars has been low and the sp is currently at or near the resistance area (converging trend lines)between 15 – 17.
The resistance areas are formed bt the down trending fork, short term down trend lines & base of the previous trading range.
Outlook.
The start of the new year may bring renewed interest (FOMO). The sp is well positioned atm for the rally to continue up & retest the 15 – 16 area (Top MLH of the fork). Once that area is cleared I would expect 17 – 18 to be the next s/t resistance. The OT announcement when it comes should see the sp up or above the upper trigger line (21 - 25 area)
BUT.
The open “outside” gap below us is statistically very likely to close and should do so in the next 2 – 3 bars (85.5% close in 2 – 6 periods) & therefore one would expect to see that close & the 13 – 13.5 area to be retested & possibly come under pressure again as we wait for the OT.
The support / resistance areas are obvious & will undoubtedly be utilised by the traders. It is clear that despite the continued derisking of the company & their delivering on all their promises, the traders / MM's will use the underlying fundamentals to back their trades & continue to accumulate & make profits.
Weekly.
Positives
At the end of last week.
Stoch 5 had crossed above the over sold and sig lines
The sp rallied off the ML of the 12 month fork. This would usually indicate a move back up to the top MLH around 17 – 18.
The histogram is beginning to rise.
The MACD appears to be returning to its sig line
Negatives
The MACD is trending down. The Histogram is below zero.
Volume for the rally was very low compared to the prev. week.
Support zone currently around 11.5 – 12.5 and rising.
Short term resistance is 15 – 16.
The sp is currently at a s/t resistance (15 – 16) extending up to the top MLH of the down trending fork (17)
Outlook.
The recovery after the sell off last week shows promise but has a lot of work to do & will probably continue to be slow with low volumes until the second week of Jan unless the OT appears.
There is the potential for the sp to retest 12 - 12.5 again this week but I think the worst is behind us.
Monthly.
Positives.
This time frame moves very slowly but there are some small positive signs appearing imo.
Stochastic is now quite wide & the sig line is flattening off & is still above the over bought line, possibly indicating we may be coming to the end of this down turn.
Volume during the selloff was lower than the prev month.
The close up & off the lows as well as above the nearest projection line shows some support.
The close is above the general long term trend line.
Negatives.
The indicators are still all trending down.
The sp closed in the lower half of the month range.
At the end of the year the sp is looking a bit battered but is showing signs of support and a rejection of the lower prices.
Support is currently around 12.5 – 13 & will likely be retested prior to the OT being announced
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