4.6 ? what next up or down? , page-8

I’ll have a go Quantam46.

Seeing distribution starting to come into Friday’s action and that strong momentum of earlier in the week fading, I sold out, hanging my hat on the fact that we’d settle and come back a bit. There are two reasons I say this:

US elections are over, so that market now returns to face some bleak short term realities and the impact is evident. Unfortunately the ASX collectively seems to act like a chook without a head when the US markets are closed….nobody to tell us what to do. Today we were lucky, we were told to go down!

Most of what I watch was red today and PEN is not an island! We will feel some impact from general market sentiment, unless of course there’s a PEN specific event that is more relevant….like a permit announcement. Those same fellows that climb aboard with lots of other people’s money when there’s good news also depart just as quickly when it’s “risk off”. There are probably a few more such days to come leading into the end of the year, and we will undoubtedly feel further impacts. The only mitigation is going to be our own news flow.

Second reason is PEN has doubled in price in just over 20 trading sessions, so it’s due for a breather. Technically we should expect to see some testing to the low side, and the volume traded is the key indicator at this point to determine the willingness of the supply side to continue providing stock when the price drops. Today the volume was relatively low, and that’s a very good sign.

If I look at my charts then the markup since 12th October to 9th Nov has a Fib retracement of 38.2% at around 4.3c. Prior to today, the 5c resistance level has been a factor in the past 4 trading sessions, and we have yet to see a finish above 5c.

Don’t forget there’s still a gap at 3.7c, although most here would agree that we won’t see that again unless the wheels come off now!

Tomorrow I’d expect to see a test to 4.3c on low volume, bouncing off the 38.2% Fib line, and then range trading between 4.5 – 4.8c until the PTM announcement.

I set my buys back in at 4.6c and happily all were filled today. This was risky; if the PTM was announced yesterday or today it would have been game on again although companies all seem to have a knack for “pacing” their good news, particularly when it’s the big picture good stuff everyone’s waiting on like we are here. I gambled on this news not coming prior to later this week, or even possibly next if the Wyoming bureaucrats are encouraged to "recheck all the details" :)

We’re going to need the PTM to clear the 5c resistance; this is a key level if you view the daily, weekly or monthly charts going back. With next Lance update + Karoo JORC on the upside still to come, less the dilution I’m expecting in the post AGM cap raising, my crystal ball says we’ll have Merry Xmas sitting pretty at the 8-9c level. Here’s hoping!