TA Update
Looking at TA for Renergen and I guess the question everyone wants an answer to is have we seen the bottom yet?
Have been watching both the leading chart REN and our asx counterpart RLT and there are certainly a few signs that we may have turned the corner...
As REN is our leading chart and subject to less volatility the moves look much cleaner and may just hold the key to whats ahead here on the asx.
To make things easier to understand where the momentum is I've switched to Heikin-Ashi candles. These candles filter out market noise and show changes and strength in trends much better. Obviously green candles are a sign of bullish strength and red are bearish.
Green candles with a solid base and no lower shadow indicate a strong uptrend, whilst red candles with a solid top indicate a strong down trend.
As of mid August the sp broke out of falling wedge pattern (on both charts) which is a bullish sign and whilst we haven't seen too much traders remorse with any great pull back we also haven't seen an explosion of buying to get a proper run going.
One negative I've had a close watch on is the Death Cross pattern that has appeared on both charts - this is where the 50dma crosses negatively over the 200dma. This is usually a bearish sign, however MA's are lagging indicators so will be slow to pick up and near term changes in trading. Both charts have shown signs of rejection of the DC with plenty of buying stepping in with any attempted sell offs.
I've been waiting for consecutive green candles with no lower shadow for confirmation that strength is with bulls and REN closed out the week with this exact pattern. As the lions share of our MC is traded on the JSE this may just be a leading indicator for whats next here on the asx
(RLT hasn't yet put two consecutive days with strong bullish candles, however there are early signs of trend strength)
The trigger I am waiting for to confirm the bulls are well and truly back in control is when the sp breaks above both the 50dma and 200dma.
REN closed above the 50 and almost right on the 200.
RLT is sitting just below both with a move to $1.69 of beyond putting us very well placed to continue north thereafter.
Have attached the daily charts for both below.
REN - daily
RLT - daily
To filter out any further noise I've also attached the weekly chart for REN.
Longer time frames hold more weight to where the sp is headed and although it may be a very simplistic approach you can see if you only traded with the heikin-ashi candles (bought on strong green candles and sold on strong red candles) you'd be well in front on the weekly timeframe.
Whilst the weekly is yet to put in a strong green candle with no lower shadow, positive signs are there.
Seeing as we were looking at lagging indicators on the daily I've used a leading indicator here on REN weekly chart (below) by using Fib retracement levels.
As you can see, you would have done great if you'd projected to the 0.786% fib line early as the bounce off this level was bang on.
If we are to project forward now then its clear the next point of indecision on REN (also on RLT) is between the 0.382% and 0.5% fib lines.
This is evident by the pause in red candles amongst the down trend.
Looking at where these levels lie on RLT and that is roughly between $2 - $2.25.
REN - weekly
As we are yet to break through the 200dma on both charts and no significant catalyst to push us north there is no guarantee that a move higher is definite but as you can see, the early signs are there...
GLTAH
DYOR
