KZA (ASX) KZA Chart

The chart remains very interesting and very bullish! This is an update to my amateur charting and some of these points I have made in my previous charts in this thread.

Looking back over the past couple of years, KZA tends to put in big breakout and continuation gaps. This current break-out is not exception with three gaps forming over the past three weeks (yellow arrows).

@kickst@rter has mentioned his dislike of gap theory, and KZA is a classic example of where gap theory does not hold according to Bulkowski's analysis. Firstly, Bulkowski finds that breakout and continuation gaps are less likely to be filled. Secondly, he finds that where the continuation gap opens near a previous high the gap is less likely to fill.

Interestingly, we gaped up away from the resistance line around about $1.49 in my right angled ascending triangle that I have been plotting over the past couple of months. More interesting is that today we opened at $1.775 opening a big gap up just below the previous high of $1.78 of 19 Nov 2020.

I posted a chart a few days ago showing that in recent history, previous highs have represented zones of support which have supported the price and prevented filling in of the breakout gaps. These are the orange lines in the chart below. Fingers crossed, support might now reset at around $1.78.

What is also bullish in the chart is that the current breakout has been on ascending volume, but relatively low volume compared to the peaks of August and November 2020. @kickst@rter made mention that volume has risen due to more shares on issue through capital raises, but let's remember that many of these shares have been accumulated by BNYMC and are held as shares on deposit underlying the stock traded on NASDAQ. That this breakout has occurred on relatively low volume indicates there is plenty of potential upside if buying pressure builds.

Recent deals have reduced the likelyhood of the need for further dilutive capital raises in the short to medium term. This, should support the share price and may be a reason, in addition to anticipated upcoming news flow, as to why this recent break-out has not drawn more supply onto the market.