Sirius Minerals shares must not close below this level
16th October 2018 08:52
by Alistair Strang from Trends and Targets
Share on
This polyhalite specialist's shares have always been volatile, but there is a price that's sacrosanct. Chartist Alistair Strang reveals the crucial number.
Sirius Minerals (LSE:SXX)
This lot are starting to give good reason for concern in the future. Every now and then, we come across a number regarded as sacrosanct and in the case of Sirius Minerals, it's at just 22.75p. What merits this analysis happened in September and again, the start of October.
On two distinct occasions, the share price briefly made it below 22.75p, thankfully failing to close a session below this trigger level. Due to our usual in-house paranoia, these two movements are a real concern, tending to "prove" we're not alone in our worry about the 22.75p level. Each break below was corrected within seconds.
What happens if Sirius now actually closes a session below 22.75p?
This one is quite unusual, due to the presence of the red uptrend since 2015. It implies some sort of bounce just above the 20p level but in reality, we suspect continued weakness to 16p can be expected. If broken, secondary is at 13p - a truly dangerous level.
The obvious visual problem with 13p will be the share price painting a pretty firm "lower low", making a longer term (or bad news) 4.25p a very distinct possibility.
As always, we've a "however" ready to be dusted down.
At time of writing, the share is trading around 25.2p, needing only to better 27p to trigger near-term recovery to an initial 29.25p. In itself, not a particularly interesting movement but the secondary, if bettered, of 33.25p will tend to break ground for continued future growth. It's not terribly difficult to project a future 39p, along with a bonk against the downtrend since 2016.
Fingers crossed time.
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.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.