Bushveld - A view from afar

Thursday, 13th February 2014 09:31 - by Osakisushi

Every now and then, I’m asked to look at a share and it provides an immediate cringe. Bushveld has been one such, simply due to the epic name being LSE:BMN, uncomfortably close to the sleeping monster which is LSE:BMR.

In the case of LSE:BMN, our primary calculations suggest it is heading to a bottom around 2.8p, the price needing exceed  BLUE on the chart below at 5.95p currently just to escape the path. This situation results in the view any recovery near term is liable to be a fake bounce. But longer term, should it reach my bottoming calculation of 2.8p, it visually presents a ‘double bottom’ picture which is certainly worthy of hope for the future.

 

So, if I’m looking for a phony bounce, what signals will I be scanning for?  Fairly obvious is the drop on the 12^th at the open. I’m notorious for despising spikes, especially at the open of trade. Invariably, the market intention is exactly the opposite of whatever a movement suggested. BMN was spiked down, so I’m looking for upward signals. Near term growth with mid-price (BUY+SELL Divided by Two) exceeding 5p will be interesting as it allows movement to an initial 5.45p with secondary, if bettered, of 5.8p. Currently, a dance step such as this will be incapable of exceeding BLUE but would simply be viewed as ‘testing the trend’.

In summary, about the nicest thing I can suggest is 2.8p should provide a bottom worthy of a bounce. But of course, in the event of the company issuing any news capable of allowing the share to actually CLOSE above BLUE, I can calculate a breakout target for the longer term at an initial 11.7p.

As always, I’ve zero idea of what this company do. My job is movement analysis and nothing else.

 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.