After shares were recently stuffed by some embarrassing news, our chartist hunts for rebound potential.
Lekoil Limited (LSE:LEK)
We've received a few emails regarding Lekoil's (LSE:LEK) recent price movements. The AIM market used to be notorious for the term "pump and dump", something which mercifully does not happen too often nowadays.
However, in the case of Lekoil, their start to the year with a boost to 11p is questionable.
Surprisingly though, the share price had exhibited a glass ceiling at 6.65p with the implication that movement above this level almost had to take the price to 11p.
It's possible the news regarding Qatar at the start of the year started the price moving in a logical uphill path, the target of which almost had to be met before anything else happened.
Sometimes, software logic makes little sense - aside from the important detail the share indeed reached 11p, then experienced considerable hesitation.
Finally, the release of news that the market perceived as negative has thoroughly stuffed the share price's potentials, landing it in a region where our best hope is for a bounce at 0.3p eventually. Of course, there's a vague chance this "Big Picture" bottom shall remain elusive.
The immediate situation suggests movement above 3.26p should bring recovery to an initial 3.48p. If exceeded, secondary calculates at 4.18p.
In fact, unusually, if 4.18p is exceeded, we can give a third target level up at 4.6p.
Visually, none of these ambitions give any real hope for the future, but, if the share were to trade beyond 4.67p, it becomes very possible the drop has been "overcooked" and some genuine recovery should take place.
For the present, we fear the price is now in the hands of "rumour vs reality" price movements but, if it were ever to approach 0.3p, we'd hope for a real rebound. Importantly, we cannot calculate below such a level.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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