As expected after such a good run the chart needed to cool down and take a breather. Ongoing positive fundamental results have kept the price from a deeper retracement. Many have been expecting each positive result too translate into a higher share price, but thus is simply not how it works. Every announcement adds weight to derisking the play, however derisking does not often translate directly to price increase. Often what derisking does, is validate the Market Cap and lift the floor towards the MC. We will continue to need ongoing positive results to continue value in the company. In a general sense the value and thus share price should lift, but not due to any specific results surrounding REE unless those results come in as a large surprise.
What we have seen on the chart is a healthy and expected retrace, as posted in prior analyses here some time back. If you are watching day to day price action it's like driving Sydney to Perth and measuring the distance between the guide posts. Far better to sit back and take a look a longer term view; look at the progress over time. Measure the distance between the towns. I don't do guideposts and mile markers, I enjoy the drive and pay more attention as we approach town.
MonthlyTo highlight this, below is a monthly chart. With a larger time frame perspective, we can easily see how this shows the progress, especially when we draw a fib on the main move. From our breakout and validation of 0.044 (A) to the high at 0.155 (B) we get a (C) of 61.8%. This means our current technical target sits around the 0.22 area. Does the fundamentals justify that MC at present? On potential value, sure. How about de-risked reality? We will have to wait and see how the market prices us moving forward. If we get to 0.22 without much change in the fundamental status quo you can expect a fairly significant retrace to occur. We will need more than ongoing positive assays to confirm REE resources to reach 0.22 and keep it, in my opinion. Perhaps a larger than expected JORC, or some of these results that have been AWOL start indicating more potential. Keep in mind this is a monthly chart so we are looking at a couple of months ahead at least.
Weekly On the weekly chart, which is my favourite view for long term investment (as opposed too trading in and out) we see our green w5 moving average has turned up off the yellow e21. The yellow e21 is a strong level for support and resistance and we see that buyers pounced on the opportunity when we tagged the weekly e21 line in the mid 8cent range. I wasn't paying too much attention, but I would imagine it didn't stay there long as was a pretty quick turn around. The week closing out where it opened (doji candle) is an indication of a reversal, adding weight to the theory that was the bottom before the next leg up. I anticipate that we should reach the high at 0.155 within the next couple of bars (weeks). A close above the 38.2% fib line (at or above 0.115) on Friday will be bullish and show that 0.155 may not be all that far away. This chart is basically a textbook technical trade. It is low risk and high probability, if I took it I would be in on the bounce off the yellow e21 with a safe stop loss at 0.08, close and half at 0.155 and the other around 0.215. We need to see the high break, pop above andUnfortunately then come back to retest it as new support.
The technical picture we have looks pretty positive, this combined with the fundamentals we continue to receive should translate into shareholder value.
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