Technically, I think one of the easiest chart to be reasonably confident about. Oversold RSI, all time low of 0.5c and strong bounce and depth support into 0.6 on reasonable volumes. Not 100% yet and will requires further signals to confirm breakout above 1c. However, one needs to buy low and sell high. Buying at 0.5-0.6c this can easily go to 1-1.2c given that
1)previous cap raise is at 1.3 and 1c 2)low volume selldown below 1c previously, therefore, breakout volume required would not be higher than expected 3) Increased interest in this share 4) No cap raising required given 25mill revenue arrangement 5) Interestingly, both RSI and MACD reached the same levels last time EDM bounced strongly from a low position 6) 0.5c is not unexpected given the charts showing a kind of a head and shoulders pattern from peak of 1.5 and shoulders at 1 (1.5-1 = 0.5c). The fact that this has bounced strongly suggest confirmation of the HnS pattern and a new pattern forming.
Approach could be buy now knowing that the bottom is confirmed and upstroke is confirmed on moderate volumes or wait for breakout at 1c or above. Personally, and this is my opinion only, It is better to buy below 1c while it is cheap and techincal bounce confirmed giving a better profit margin than to wait for a major breakout at 1c before taking action. Furthermore, the 1c resistance is significantly weaker than the 1.5-1.6c resistance given cap raising at 1 and 1.3c.
We shall see how good my technical interpretation is of EDM by Friday or early next week. Predict up to 0.8c-0.9c by Friday, mild resistance at 1c and then depending on announcement may break 1c heading to 1.3-1.4c mark after June tax loss selling.
Lastly, EDM provides one of the best fundamental and technical combination for a trade speccy atm in this market.
What are your opinions??
EDM Price at posting:
0.6¢ Sentiment: Buy Disclosure: Held
