Hi Rainman
I agree with your post, especially
" Nothing to do with the intrinsic or fundamental value of the company and everything to do with simply where the chart is at".
Not many who follow chart posts across the entire HotCopper platform understand that concept. Fundamentals are alway's there in the background with strong fundamentals inevitably leading to growth as the opposite with weak fundamentals.
In my last post I included a monthly chart (the big picture) showing so far three major waves:
1) 0.125c (Mar 2020) to 3.89 (Jan 2022) climb
2) 3.89 (Jan 2022) to 1.975 (Jun 2022) Fall
3) 1.975 (June 2022) to 5.66 (Oct 2022) climb
Just from these three waves even a simpleton can see that the fundamentals are very strong with a rise from 0.125c to 5.66 in a two and a half year period, amazing. However, understanding that strong fundamentals can give false perceptions of where the SP is going next. When the market get over enthusiastic about strong fundamentals the SP can become over-bought which happened once the SP hit 3.89 so a correction was almost inevitable. The correction took us down to 1.975 where the SP became oversold and not a reflection of strong fundamentals.
Next we have the next surge from 1.97 to 5.66 a 286% rise in just four months. No doubt this was again accredited to strong fundamentals.
As a chartist this last remarkable rise sounds, feels and even smells just like the last remarkable rise and seems to be venturing into the over-bought territory yet again.
Is it time for a correction again?
By looking at the weekly chart in the last correction from the 3.89 peak high two significant lower-highs 3.76 and 3.08 occurred and in between these three highs were three significant lower-lows 2.56 , 2.37 and 1.97 before the falling pattern stopped. So I will be watching the weekly charts for lower-highs and lower-lows to give me some confirmation about what's going on.
In the short term I will also be looking at the daily charts for a similar story. In the daily chart below I have shown the possibility of lower-lows being established if either of these three resistance levels are breached 4.60 , 4.54 and 4.33. If that plays out and we set a new lower-low then a bounce to set a lower-high should occur. If that bounce is stronger than expected and gets above 5.66 then all correction bets are off and we are off to the races again.
We shall see.
Just the way I deal with the markets so that I am not surprised by what plays out, as always DYOR.
cheers Lies
(20min delay)