Say 'Allo 'Allo to RENE

Friday, 9th May 2014 08:23 - by Osakisushi

I’ll get the messy bit out of the way first. This share is viewed as heading to a bottom of 2.025, the price needing exceed BLUE at 3.95p to cancel the argument.  Worse still, in the event of the company issuing a dodgy news report, I can argue for an ultimate bottom of 0.30p or so. What bothers me – a lot – is the circled area on the chart.

When I run the numbers from the beginning of time, the price should have found a bouncy bottom at 2.3p yet the share price managed below this level for the last couple of months of 2012. From my perspective, this is not a comforting signal given it either implies inherent weakness in the price or, my calculations were wrong… Unfortunately, when I use the same formula to map movements since this disaster, the numbers work out, suggesting my software has been doing its stuff.

So, to summarise the gloomy start to this report,  this is stuffed and viewed as heading to 2.025p with secondary, if broken, at 0.3p. But there’s another aspect to life which I cannot ignore.

The start of 2013 illustrated a rescue movement, dragging the share price above the Light Blue trend and ‘proving’ the bottom level was indeed correct, even though it had been broken. Better still, this motion nudged the share price into a zone where my software tends to focus on looking for UP movements rather than DOWNS’. The reason is fairly simple – the price had escaped the immediate DOWN trend, so hopefully can start going up.

Of course, this is something the share has focussed on avoiding since but I’d be extremely interested in any motion above BLUE. Even CLOSURE above 3.82p would be significant as it would be sane to anticipate a breakout movement to  an initial 4.95p with secondary, if bettered, at a longer term 6.15p.

Therefore, to summarise the optimistic side of the report, the share price is in territory where it can actually be expected to go up. Either intraday movement above 3.95p or closure above 3.82p would give me an early warning signal of coming movements to 4.95 with a longer term 6.15p possible.

Similar to many shares in 2014, the price has been hopping on the spot, presumably awaiting that all important news report capable of kicking it into life. Good luck with it. I’ve focussed on the dangers, ‘cos that’s my job but in truth, it certainly has potentials. It just needs to start going up!

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.