upward momentum incresing, page-13

Tamaya is down 82% just this year. And it recently hit support that’s been good for almost half a decade.

The thing is, the bulk of the risk is now on the upside. It was trading at $0.35 on July 26 last year. It closed at a low of 6 cents last Wednesday.

Despite the high copper prices on the commodities market, the stock has suffered more than the sector or equity indices.

The last time it hit the support, the stock doubled in quick time. It’s already up over 40% since last Wednesday. This morning it’ll cost you 8.5 cents.

Look at the short-term chart. It frames the massive decline that took place between October 2007 and July 2008. Price moved down in a bearish channel. That’s important. The upside of this channel should be the near-term resistance of the rebound generated last week. That’s not far away now.

But our main target is higher.

Why should price action jump the first wall? Well, the technical indicators show some serious momentum.

The RSI has plunged to unprecedented low levels. The stock was never this oversold before.
But here, as the stock has begun to bounce back, the RSI has curved upward and crossed above its signal line. It’s a bullish signal that should convince technical traders it’s time to buy back.

The MACD confirms this. It crossed above its signal line. The bearish downturn experienced previously is likely to be over. This momentum should give Tamaya enough speed to crack through the upper channel.

A rise above 9 cents would mean that the price action has definitely escaped the bearish channel. After that…we’d focus on the retracement ratios.

In this scenario, $0.125 and $0.17, respectively the 23.6% and the 38.2% ratios, will be the next targets on the medium-term. They correspond to gains of 47% and 100% from this morning’s price. A big fall leaves room for big gains.

On the downside, the long-term support of $0.06 looks solid. Only a break below this price would trigger a further new bearish move. That’s unlikely to happen, but possibly. Regardless, the upside definitely outweighs the downside risk for Tamaya.

Good investing,