weekend charting 29-01-10, page-125

Hi Timjohn22,

The attached chart shows my take on ROL.

The announcement on 8 Dec of the discovery of a world class high grade gold deposit sparked the spectacular rise to its peak on 11 Jan, on extremely strong volume, initialy. The bout of profit taking on medium volume dried up over a few days only, followed by a progressive decline of price over the last two weeks, but noticeably on comparatively small volumes.

Regarding the chart, I have labelled the median line in two places so that it can be easily distinguished, given that this chart contains not only the blue pitchfork, but also the pale blue, green and magenta parallels (1st, 2nd and 3rd warning lines respectively). Note that price has now returned to the close below the EMA 41 line, but precisely on the blue median line.

I expect the price to continue lower before returning to retest the blue median line as resistance, but given the comparatively small volumes of the most recent trading days and the fact that $1.422 reprents the 0.618 Fibonacci retracement level, I suspect that that may limit the downwards movement. I think the asessed potential of the stock, given the recent discoveries will halt any further decline at either the 0.618 Fib retracement level, or at the lower tyne of the blue pitchfork (say $1.33) in the worst case. I would be watching closely to see which of these two levels holds and provides a bounce, at which time I would top up current holdings. I do not currently hold ROL.

Hope this helps.

Regards,
Bones