february 27 eka charts

I believe Sharejon was after a bit of a look at EKA on the weekend charting thread, so I may as well put this up on the stock's own forum out of the way of the congestion on that other thread.

First up I should say that I reckon this company has really strong fundementals, and there should be long term upside for the years ahead given the market cap is still under $100M for everything that management have achieved; Eagleford JV, acquiring new acreage etc etc. I used to hold AUT so I have followed these two stocks on and off over the past few months. Holders are onto a great thing with EKA.

Now for a look at the charts...

While the weekly indicators look a bit toppish, the daily indicators have turned on a dime during the last few days of trading, so very much a mixed picture is being thrown together. The stochastics should diverge off the green trendline on the weekly chart if they were to drop that low and the weekly money flow is looking a bit toppish.





However, the daily indicators show that buying momentum and strength is returning to the stock. Given what is being shown on the weekly indicators, we could see a bit more sideways movement as they cool off a bit, but the daily indicators are indicating that this sideways movement would be controlled by the buyers (i.e. favourable market depth, strong closes etc etc).





So what does all this mean for the price? Well the sideways movement being discussed above is validated by the prominent green channel shown below which has a bit of room for the price to consolidate sideways along it. However, as those weekly indicators move in favour of the buyers in a few weeks (stochastics diverging again) you could expect the beginning of another upwards move. I have a target of 54cents in June, which I think is more than reasonable, even a bit conservative if you consider that the recently announced exploration well due to be drilled around that time could really be company defining for EKA's new acreage. For what it's worth, you also have a 70cent target down the track which would be a retest of all time highs.





Overall it looks really good! I see no reason to be running to the hills so to speak, and I would be thinking of the next few weeks as an ideal 'top up' period.

Cheers!