Over the last few months, ST1 hit an all time high, underwent a...

Over the last few months, ST1 hit an all time high, underwent a correction, and is struggling to consolidate.

In hindsight, the telltale sign was the bearish engulfing candle on September 3rd.^[1] On that day, It opened at an all-time high of 0.45, only to close at 0.40 - a 10 per cent drop from the open. That was the end of the multi-month rally.

By the end of September, ST1 closed at 0.35, breaking the pink line of support.^[2] A few days later, there was another touch of the descending yellow support line (taken from intraday lows).^[3]

In mid-October, a sudden bounce saw a testing of 0.40 - this was a key price line, being the close of the past bearish engulfing candle. But the daily candles could never close at that price,^[4] and things soon went bearish.

This became a downtrend for the rest of the month, and another touch of the descending yellow line, this time at 0.325.^[5] In the past week though, ST1 had taken another bounce off that line.

Looking at the upside, it first needs to contemplate some potential overhead resistance (blue line) around 0.39.^[6]

Looking at the downside, there is still a gap between 0.32-0.325 (grey zone). This emerged in August, and hasn't been filled yet.^[7]