weekend charting march 18-20, page-87

Hi Second,

Sorry if I've missed you today/tonight already. I'm a bit of a night owl so my posts are always pretty late, but here's my take on Galaxy Resources (GXY).

The GXY chart below contains three pitchforks; an older navy pitchfork with three associated warning lines in light blue, a downwards sloping red pitchfork, and a shorter term blue pitchfork with internal 0.50 lines dividing the upper and lower channels. The last two of these pitchforks are the most significant in terms of explaining current price movement.

On 5 February, the intra-day low of $0.980 made a perfect touch on the median line of the red pitchfork at point A on the chart and from that time price has been trying to escape the influence of the red fork and its assocated Warning Line (marked as 1st WL). This same movement can also be described in a different context by the blue pitchfork whose internal 0.50 line appears to be more significant at this stage than the lower (support) tyne of the fork. I say that because price has moved in the channel between that internal 0.50 line and the median line and has tested and retested that 0.50 line as support and resistance in the same way that you would expect it to treat the lower tyne of a pitchfork in most other stocks.

Price has now reached a very important point (marked as point B) which is the junction of three significant lines the red warning line, the 3rd warning line of the navy pitchfork, and the internal 0.50 line of the blue pitchfork, and on Friday price closed above that junction. In doing so it completed a successful attempt to breach the resistance level of the 0.50 line, it closed above the 3rd WL of the navy fork establishing that line as current support, and it also closed above the red warning line and therefore outside the immediate influence of the downwards sloping red fork.

My reading of the chart, tells me that this is a very strong combination of factors and a very bullish signal. I note that it also did this on extremely strong volume. I fully expect the next price move to be upwards and towards the median line of the blue pitchfork as a first target. It may take a path up the pale blue line rather than via green arrow I have shown, but the median line is where I believe it will be heading. Note that the stochastic has also just turned up and also the red EMA 8 line could well do an upwards cross over the EMA 41 in the next few days, although in all fairness the latter is not clearly imminent just yet.

That's a bit of a long winded explanation, but I wanted to ensure that you could follow my reasoning out of what probably looks like a mass (or mess) of lines.

Good luck,

Regards,
Bones