FAR (ASX) Kosmos etc

Originally posted by PhillW ↑

I don't think I've seen FAR stick to a TA prediction yet.

I trade currencies for a living using only TA and have a 65-70% win ratio. There are a lot of TA people out there but the two fundamental mistakes I see a lot make is that they fail to;

1. Backtest the chart being analysed to determine what technical indicators and chart patterns have worked on a historical basis for the stock being charted, and
2. Do not look at a higher time frame chart to determine the most important technical aspects. The most profitable chartist look at higher time frame charts for technically relevant information (entry/exit) criteria but then look at the lower time frame charts to time their entry/exits. I.e. weekly/daily chart or daily/hourly chart combinations etc.

By only looking at the one time frame chart, chartist increase the likelihood of failed entries.

If you look at some of my earliest charts from June 2016 you would note that I commented that FAR needed to close above 8.7c on a weekly closing basis for evidence that a breakout was occurring which is yet to occur. Since March we have the following weekly swing highs;

18/3 - 12c high (9.6c close)
20/5 - 8.9c high (Close 8.7c)
29/7 - 8.6c high (7.9c close)
14/10-8.3c high (8.1c close)

So the most obvious observation we have from looking at the above swing highs is that FAR has been in a down trend since March 2016 but last week we have the first bullish closing swing high since Early March 2016. The May 20 swing high/close is the all important swing. A break above and a weekly close above the May 20 swing high with a significant increase in volume would have momentum traders jump on the FAR band wagon and factor in projected targets of 10.5/11c. It also helps that WTI and the XLE (Oiler ETF) are attempting to breakout to new highs and the fact that we have a US election that may provide the trigger in the coming weeks is very relevant. This is the perfect storm. Unfortunately, the FAR chart shows that on a historical basis it is a pump & dump stock. Another words, all moves historically have been 4-6 week pump and then the a falls out of it. What we want to see which would indicate FAR is becoming investment grade stock is an up move followed by a consolidation then the next up move etc. A failure of 7.9c and a fall down towards 7.4c before taking out 8.7c would make the FAR chart look healthier from a technical stand point because it would show accumulation, profits being taken at resistance zone and subsequent sell down to support and then accumulation at support prior to rallying past prior resistance.

So what I'm saying is that all the stars are aligning fpr a sp move into the low teens. The reason the shorter is so confident to continue shorting even as technical resistance leves fail is because the odds of FAR opportunistically announcing a capital raising after any rally has historical precedence. FAR management need to stop being so predictable as it is their predictability that has fattened the shorter over the past 18 months. Now I know there are people out there that are skeptical as to my earlier post that WPL taking a placement in FAR would be good but the biggest negative for FAR is the funding monkey and that was to be removed then the shorter would be forced to cover and by doing so would potentially launch FAR into the mid teens. If you studied Morgans Research Paper you would note that their valuation for FAR would drop from 21c to 15c if they were forced to raise equity in the current market environment. It would also be a brave person who could categorically state that FAR would not be tempted to announce a capital raising should the SP rally above 10c. As for the argument that by WPL having a stake in FAR would strangle the sp, well FAR would be valued on fundamentals and cash flow and be an ASX 200 company so strangle all you like because it would have no effect. The only people worried about a company like WPL having equity in FAR is the speculator hoping for a T/O or wanting a T/O premium in the sp.

What could sabotage the above is;

1. Announcement by FAR stating that the next drilling program is 3 or more wells because that uncovers FAR's achilles heal of the funding monkey on their back;
2. A trump victory would be bearish share market and XLE index (big time) but may be bullish WTI due to perceived increase in global political tensions.
3. FAR P/E negativity.

Expand

I guess the other thing that could be negative for FAR is if the Djiffere announcement is not what we hope for. What if the 3D seismic doesn't show anything worth investigating? Seem unlikely given the previous tease of "The best $1million we have ever spent", but you never know.
Are they going to let us hanging right until Monday October 31st?

No.	Vol.	Price($)
1	27749	48.5¢

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Price($)	Vol.	No.
0.490	10005	1
0.505	10000	1
0.510	69689	1
0.515	2239	1
0.520	30000	1

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(20min delay)
Last 48.5¢		Change -0.010(2.02%)		Mkt cap ! $44.81M

Open	High	Low	Value	Volume
49.5¢	49.5¢	48.5¢	$34.87K	70.84K

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