sub-sahara resources (sbs)by catherine davey, 25 a

Sub-sahara Resources (SBS)
By Catherine Davey, 25 Aug 2004

Sub-sahara Resources is a small resources stock that is standing tall in the midst of a sector wide slump. Can the uptrend get back on track?

Same as Yesterday

This stock is a similar to yesterday's stock of the day, Range River Gold (RNG). It's not uncommon for a group of stocks in the same sector to be following similar patterns. It reflects the sector sentiment and can be a used as a confirming signal before you decide to make a trade on an individual stock. Like RNG, SBS completed a double bottom pattern to launch the uptrend. Also similar to RNG, SBS recently rebounded near the highs of the of that original double bottom pattern.

Measure of Strength

The recent high for SBS demonstrates the power of the Fibonacci 38% retracement level. This level is my barometer of strength. When a stock is on the comeback trail it will often find resistance at this level. That doesn't mean the new uptrend won't go higher, but if and when the 15c level is breached, it not only confirms a break above an old high but also a break through this key Fibonacci level. That gives it two reasons to go higher if that level is crossed.

Outlook

Since the rebound at SBS has built a series of two waves with higher highs and higher lows. As long as this stock can stay above the 5.6c lows the uptrend has a chance of resuming. The official resumption of the uptrend doesn't happen until SBS closes above 15c. That gives a first upside target at 24.5c. A close below 15c and SBS could retest the 2001 lows.

Support:- 0.056; 0.035; 0.014

Resistance:- 0.10; 0.13; 0.15; 0.185; 0.245; 0.29