Chart of the Day: Highlands Natural Resources

On the face of it the recent journey for shares of Highland Natural Resources has been the worst of white knuckle rides, even though the move to the upside after the break of the main 20p zone to 70p plus was relatively well flagged.

Highlands Natural Resources (HNR): Support Still Above Key 20p Zone

Highlands Natural Resources may have “upset” one or two people since the big double top over 70p for May and June. The main hit was really the way that the retracement back from the former pre April resistance zone was so painful. While it has to be admitted that anticipating such a pullback was not exactly easy to do, there was at least one clue it could occur: the rally itself was “easy” to spot and get on board. Indeed, it looked to be on the cards almost as soon as the 20p level was printed at the end of April. But the end of the move higher was flagged by the bearish divergence in the RSI accompanying the late May high towards 80p, a clear sell signal – although I would venture to suggest, not one that most bulls of this stock might have wanted to pick up on. At least it can be said currently though, that while there is no break back below the latest 22p floor, the upside here could be back towards the 50 day moving average at 38p over the next couple of weeks, even if this is only a temporary respite.