Technicals | Nov 07 2019
Bottom Line 06/11/19
Daily Trend: Up
Weekly Trend: Up
Monthly Trend: Neutral
Support Levels: 25.27 (?) / 22.00 / 21.42
Resistance Levels: 26.82 / 29.62 / 30.56
Reasons to be more positive (above 25.27):
? A key resource required in the emerging technology sector
? Limited producers globally yet growing
? Europe and China seen as major consumers moving forward
? Bullish reverse Head & Shoulder has triggered post longer term downtrend
Off the larger push lower, our deeper end 61.8% pullback zone targeted 24.79. We ended up exceeding this by a moderate number, with price eventually locking in a potential significant low point circa 22.59. In our last review we tentatively identified this as being the head of a potential head & shoulders reversal pattern. This has now come to fruition with price action evolving further since our last review.
The break number above the neckline triggering the pattern was 25.28. With the target for this pattern measuring in at 28.00. A price point that sits within a resistance zone between 27.50 and 30.50. If and when price attains target, it will be this resistance zone that will be the next hurdle for price to overcome.
We are overbought right here with price hugging the 200 day moving average. A line in the sand that has been keeping price in bearish mode for just under 2 years. A convicted break above here should then see price head towards 28.00 shorter term. With the potential for higher medium to longer term if impulsive upside price action can continue to sustain. Plenty of work still do for us to be convinced that a turnaround is now in progress. Yet it's a good start.
We don't offer up formal recommendations on ETF's as it's not within our scope. Yet in our last review we suggested that any move above 25.27 that triggers the bullish reverse head & shoulders pattern, could be an early signal that we are finally done with the downtrend. As stated, the pattern has now triggered with the target being up towards 28.00. Possibly a good time to start adding to your watchlists some beaten down ASX Lithium stocks !
Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).
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