InterQuest: Bear trap gap fill reversal points towards 60p

Given that I seem to be interviewing high profile investor Jim Mellon every other week, it would appear churlish not to look at InterQuest (ITQ) and his increased stake in the specialist recruitment group.

I presume Jim Mellon did not make his millions from studying charts. However, it could be argued Mr Mellon behaved as a chartist on the basis of his increased stake in the digital economy recruitment company to 5% last week – just as the stock bounced off the main support line on the daily chart running at 26.5p. What can also be seen from the RSI indicator window is the way an uptrend line can be drawn from June, with a rebound in the form of bullish divergence coming through to back up the bear trap effect seen for the price action. Indeed, the message at the moment is that at least while there is no end of day close back below the former support from October at 30.5p, we could be treated to further considerable upside. Just how high InterQuest shares could stretch is suggested by the area of the 200 day moving average at 61p, a zone which may be hit on a 2-3 month timeframe. Only cautious traders would wait on a weekly close above the 50 day moving average at 35.3p before taking the plunge on the upside.