break up out of trend channel imminent

NSE - So we are now approx 2 weeks away from spudd'ing the Merlinleigh 100% owned well in WA Carnarvon Basin which is next to existing Dampier to Bunbury gas pipeline.

Investors have and will continue to take positions to gain exposure to this well (and it's associated news flow). As previously said I expect an uptick buying interest on news that the Rig has been mobalised to the Carnarvon Basin and a Surge on approach to and at the Spud date.


At this point I thought I'd put up a Tech view on what is likely to occur.

The real key to the commencement of the rally will be a break of the 14.5c resistance line (the lowest orange line).

This is likely to happen in either of two ways and I have provided two charts showing the share price trajectories I'm expecting (in Blue). ... Note: I cannot predict what day it will happen only that is highly probably that it will occur.

The Orange lines on the chart represent area's of prev historic resistance and area's where we can expect the share price to pause on is upward climb. The Green lines are area's of historic support.



Traditional Range break
The first chart is a traditional break of a trend channel where the price simply forces its way through the upper 14.5c resistance line with increased volume (Be suspect of a break above which does not have increased volume). This style of break up usually accounts for probably 70-80% of trend channel breaks in my experience

False break down then Rally
The second style of break is where the price temporarily dips below the trend channel finds strong support and then pushes back up through the Lower and upper trend channel lines. Quite often this is engineered by insto's as a test or to flush out weaker hands by triggering stops set just below the Trend channel.

For more info read through my posts on the NSE Thread...


All is IMHO DYOR to Confirm.