Kaz Minerals: Major warning signs to watch out for

On a downward path, our chartist has doubts about the shares and fears possible irrational price moves.

Kaz Minerals PLC (LSE:KAZ) 

KAZ Minerals (LSE:KAZ) is a case in point as the big picture presently indicates some reversal as viable and we've a problem. 

Our targets will see the share price decline below the uptrend since 2016 and this will be arithmetically bad.

The issue we have with the share is fairly straightforward. If the price of Kaz closes below red on the chart, ultimate bottom - from a big picture perspective - calculates at minus 215p, obviously an impossible ambition. 

Unfortunately, once shares start to perform in a region where "ultimate bottoms" are prefaced with minus signs, some truly irrational price moves can occur. 

For example, witness the current mad swings experienced by Thomas Cook (LSE:TCG), a share with a pretty solid bottom target in negative numbers!

At present, the ruling uptrend (red) for KAZ calculates at 345p. Closure below this trend risks some troubling movements and at present, there's a problem. 

Weakness anytime now below 376p will be regarded as entering a cycle to an initial 305p. If broken, secondary calculates at 270p, a point we'd normally hope for a bounce. 
 
The big issue is both target ambitions afford the share the chance of closing below red, trapping the price in a zone where it shall need some sort of miracle to escape. 

At time of writing, Kaz is at 402p, looking fairly safe. We have our doubts, if only due to the visual risk of "lower lows".

If there are to be any near-term surprises, apparently above 408p should provoke a rise to 414p soon. 

In itself, an utterly useless movement but one which should trigger a near-term secondary at 435p, perhaps even 480p if riding on the back of stronger commodity prices. 

We're not breathless with anticipation and suspect 305p shall make an appearance eventually.

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.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.