Frontera Resources: Rebound above former resistance

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Frontera Resources: Rebound above former resistance

One of the reasons for thinking that the good times are finally returning to the small caps space is the positive newsflow and stock market reaction at Frontera Resources (LON:FRR).

Rather like all too many minnows, fans of Frontera Resources have really been taken on quite a journey over recent months. Alas, much of the journey has not been very comfortable, a point which is underlined by the way the stock sank from 0.7p at the beginning of last year, to below 0.10p by the end of it.

Fundamental intrigue along the way included the announcement in July where the company said it was not liable for the $30m debt of one of its subsidiaries. For this year things have been no less exciting in the sense that last month the company insisted that production would rise despite delays.

Nevertheless, the standout on the newswires of late has been the confession from the group that it knew of no reason for the significant share price spike. What will be key now going forward is whether the dip we have seen to just below 0.2p will be a dip to buy into above the 200 day moving average at 0.10p.

The implication is that at least while there is no end of day close back below the 200 day line we shall be treated to a retest of the initial 0.39p February intraday high. The way that we have gapped up through 0.2p to start the week suggests that towards 0.4p could be achieved over the next month.

frontera chart

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