88 Energy: Bullish wedge break to lead back towards 3p

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88 Energy: Bullish wedge break to lead back towards 3p

It has been a rather frustrating autumn for fans of 88 Energy (LON:88E), but in the aftermath of the latest price action recovery here, it would appear the waiting game is over.

One of the more tricky aspects of investing in small caps is that, on occasion, expectations and share prices can run away with themselves. This of course means that some in the market can be left somewhat high and dry in terms of where they have bought into a story.

What can be seen on the daily chart of Alaska focused explorer 88 Energy is that there was a degree of over enthusiasm in the summer above 3.5p, which has now apparently cooled off. Combined with the news that its conventional portfolio has “exceeded expectations, this should ensure that the stock’s retracement is finally over. An added bonus is that we should have resource estimates as soon as the end of 2016.

From a technical perspective it can be said that as little as an end of day close above the August wedge at 2.25p could be enough to bring in the process of a retest of the post-October resistance at 3p plus. Indeed, only back below 2p on a weekly close would even begin to suggest we are set for a further period of share price disappointment.

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