a look at nwe's tea leaves

Just having a look at NWE's chart to see what potential resistance we may face as the frac starts/progresses.

Price closed up at 7.3, which is a level tested a couple of times already, but yesterday's trading was definitely buying driven.

I have marked two zones of potential supply dating back to March when price was driven all the way up to 9c. What I cant show on the chart is the potential supply of 100M shares at 5c, created by the recent SPP.

The way I see it, the volume in potential supply zone 1 (indicated) plus the SPP shares combined (probably about 300M shares combined) are the potential supply resistance to drive price through the 7.3c level. The advance over the last 2 weeks has churned through about 80M shares to get to the top of this potential supply range. Imo with the frac starting we are now done with this range.

Now we have the next key level at 9c. The potential supply zone 2 (indicated) is all that stands in the way. Assuming trading volumes continue at reasonable levels (> 5-10M shares/day) attracted by the interest in the frac, and assuming we get favourable progress reports on the frac, then once we break the 7.3 level it will not take very long to be testing 9c. I'll stick my neck out and say imo we should be there within the next 1-2 weeks.

Cheers, Sharks.