MEM Discussion, page-258

Here is also an analysis done by chat GPT further proving my point, all technical points bearish:


Prompt: From the attached chart please provide a detailed analysis on whether the techincal analysis points towards a bullish or bearish bias

1. Price Action (Long-Term Trend)

• Macro Trend: The chart shows a prolonged multi-year downtrend from above 0.045 AUD in 2020 to the current 0.005 AUD — an ~89% drop.

• Price Structure: After peaking in 2020, price action formed a rounded top, followed by lower highs and lower lows, textbook signs of a bear market.

• Current Position: Price is sitting right at the historical support floor (0.005 AUD), which has held multiple times in the past — but each bounce has produced lower highs, implying distribution rather than accumulation.

• No Breakout Attempts: There have been no credible breakout attempts above prior resistance levels (0.015–0.020 AUD) in years.

Bias: Strongly bearish trend remains intact, with no higher lows or bullish reversal patterns.

2. MACD (Moving Average Convergence Divergence)

• MACD Line & Signal Line: Flat, and hovering slightly below zero — confirming lack of bullish momentum.

• Histogram: Barely positive/negative; reflects stagnation in price movement.

• Historical Comparison: MACD showed strong bullish activity during 2020’s rally, but since mid-2021, it’s been below the zero line consistently — indicating sustained bearish momentum.

Bias: Bearish to neutral — no bullish crossover or divergence in sight.

3. RSI (Relative Strength Index)

• Current Value: ~42.59 — below the neutral 50, suggesting bearish pressure.

• Pattern:

  • RSI rarely enters overbought territory, even during rallies — a bearish characteristic.

  • Most recent RSI peaks faded below 60, another sign of weak buying strength.

  • In early 2023, RSI briefly entered oversold (<30), rebounded slightly, but has since hovered between 40–50, lacking conviction.

Bias: Bearish — RSI trends consistently below 50 with weak recovery attempts.

Support and Resistance Zones

• Support:

  • 0.005 AUD is a historical floor — key psychological and technical level.

  • If this fails, there’s no visible support below; price could enter “price discovery to the downside.”

• Resistance:

  • Immediate resistance sits around 0.010–0.012 AUD, followed by heavier resistance near 0.015–0.020 AUD.

  • Each bounce off 0.005 fails at lower levels — indicative of a weakening base.

Bias: Bearish — unless 0.005 holds and breaks above 0.010 with volume.

Volume & Liquidity (Implied)

• While this chart doesn’t explicitly show volume bars, price gaps and erratic candles in early years suggest illiquidity.

• Illiquid stocks are high-risk and difficult to trade, often manipulated or prone to breakdowns due to lack of buyer support.

Bias: Bearish — from a risk management and market structure standpoint.

Summary Table

	Aspect	Observation	Bias
1	Price Action	Multi-year downtrend, lower highs	Bearish
2	MACD	Flat, below zero line	Bearish-Neutral
3	RSI	Hovering below 50, weak recovery	Bearish
4	Support/Resistance	At support with repeated failures	Bearish
5	Liquidity & Volume	Illiquid, high-risk environment	Bearish

✅ Final Conclusion: Strong Bearish Bias

This chart paints a clear picture of a stock in long-term decline, with no current signs of a trend reversal. Technicals do not support a bullish case at this time.

• Only potential bullish case: If price holds 0.005 and forms a double bottom or higher low with a clear MACD/RSI divergence and volume spike — but none of those signals are currently present.

• Until then, bias remains strongly bearish, and further downside is possible if 0.005 breaks.