any opinions on the next few weeks, page-6

Hi all,

I thought I would post the attached chart on BRM as at yesterdays close (22 Jan) and describe what I see as the possibilities for price movement in the next week. As always, comments or alternative views are welcomed as I am focused on us all acting on what we consider to be the best available information, after a balanced assessment of the available indicators. The following assumes the absence of any significant announcements from BRM on rail access or any other matters in the next week, which could entirely change the current situation.

Following the sustained rise since 15 December, the price dropped for the third consecutive day on Friday to an intra-day low of $2.53 which made an exact touch on the median line of the green pitchfork, before recovering to close above that line. In pitchfork theory, the price always tends to return to the median line and at this stage that line has provided support (i.e. was not penetrated) on its initial test.

It is normal to expect the price to retest the support provided by the median line and despite any subsequent downwards penetration by future intra-day lows, I will be looking for the closing prices to remain above it to constitute a successful retest. That would provide me with an assurance that this level of support will hold and will provide a good base for another upwards movement. A successful retest of this line during the next week would give me sufficient confidence to add to my holdings on current weakness, in anticipation of the next rise.

Should the green median line fail to provide that support, then the next level of support to look for would be at the median line of the blue pitchfork (currently shown at around the $2.41 mark) where the EMA 41 line is also located. A similar test/retest of support scenario should occur at that level, for the same reasons.

While I can not predict which of these two levels of support will prove to be effective, I will not be buying any BRM on current weakness until I see at least a successful retest of the green median line in the next week.

If the price closes below the green median line, then I will be looking to the blue median to provide support, but I will not be buying any BRM on weakness at that stage until I see a successful retest of the blue median line and a bounce off the EMA 41 line. I always look for the retest and its outcome to reduce my level of risk or reassess. If I occasionally miss a good trade because of it, then so be it there will always be others and my capital is still safe.

As for next Monday (25 Jan), if the price should rise above Fridays high of $2.68, I will try to resist the temptation to regard this as an early sign of recovery as the next visit to the green median line may not be just a touch, but may well see the price penetrate and close below the line. I will be waiting for the successful retest of the green median line or an indication that the second scenario above is starting to play out. Just my thoughts.

Good luck to us all.

Regards,
Bones