RE: RSI10 Aug 2020 12:50
CI, I'm no expert on the technical side of this. All chart patterns are, are graphical representations of the SP movement. The theory being its not the company that moves the SP, but people buying and selling and as peoples as a group are predictable therefore, so the theory goes, chart patters could/should repeat themselves. To help refine this further algorithms were designed to increase the accuracy in conjunction with the chart pattern.
And experience of the RSI suggests that above 80 its over bought and therefore likely to fall and when under 20 likely to be over sold and therefore likely to be bought. and that's because the RSI is linked to the SP through the algorithm . So on the way up the RSI moves up with the Sp and likewise down with a fall. What determines the exact figures is part of the algorithm of which I know nothing.
Very short term the new resistance is the latest high at 3.88p it is too early to tell how tough this will be to break as its never been tested.
Personally fwiw, I 'm not fixated on it as presently this looks like a straightforward retrace so the SP can move further upward, so I don't see as of writing any particular significance other than it was a high, of 3.88p
Going further forward it's harder to predict a new level because for a long time, over 12 months, it was about 5,6,7p and just very gradually declined making particular levels of support not very clear.
My take (and looking at the bullish case), is given the explosive change recently I think it will go to 6.50p ish and that will be a target to break through and then on 10.5p and then to 17p and then to 25p.
If the turnaround in Eve's fortunes is as dramatic as we all hope then I see 17-25p as a trading range. What I have found over the years is that I am no good at puting time limits on movements. I guess I would like to think it will to around 6.5p before sept. Break through to 10p on sept results and then maybe the next update pushes it to 17p so what, 6-9 months to 17p?
This will probably turn out to be a load of old pony, and no doubt many reading it here will of already come the that conclusion!
Having said all of the above, the patterns that the SP makes during the next few months may well change all of my current thinking and new levels/expectations will appear more likely. Who knows?
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