Technicals We've been busy trading out the handle pattern since July 17th when the stock price peaked at .57.
This week was important technically to the pattern as we dipped just below the .37 resistance which saw some selling pressure emerge (as you would expect with a break). With the close of this week ending back above resistance that breakdown creates a false break and the end above .37 keeps the pattern in play.
This cup and handle is very well established and has a few elements but the key dates are May 5, 2020 when the stock tipped .48. From that time it started the journey of a long cup pattern with several up and down swings along that route. It peaked on the right side of the cup July 10, 2023 at .57.
The July 10th .57 through this week continues to form the handle with that handle showing a short relationship to the very large date range of the cup. It can continue longer however what I like this week is the push down and pop back above that former .37 resistance. It has the potential to trigger a move anytime now.
The stock price targets are two fold from this pattern.
The handle from .57 to .345 (current range) varies by 22.5 cents and is added to the former high of .57. This sets up target number 1 as .795 cents. That's the next high in the breakout I expect.
Likely we see a small correction at or around the .795 before target #2.
Target 2 is set from the low of the cup at .16 on Sept 19, 2022 to the .57 high on July 17, 2023. The difference in these two is .39 and added to .57 to set the second target of .96.
I made two more purchases this month just below .37 and again at .355 this week.
For the long term holders ( I am ) these targets are helpful if you want to lighten up or add some stock while maintaining a core position (I do).
There are very good fundamental reasons to stay with this beyond .96 in my opinion however there are drill results we need to confirm that hypothesis and we don't have the detail yet. I suspect the fundamentals to drive to .96 are forthcoming.
Enjoy the weekend!
glta
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