Bizarre, is the best description of the offer made for Metal Tiger (LON:MTR) last week. But it may be that this now offers an opportunity to squeeze some bears.
Metal Tiger is certainly a private investor favourite, helped along by the inspirational leadership of its former head honcho Paul Johnson. But things took a strange twist last week when the company was on the receiving end of an offer which was essentially half the then share price.
This was obviously batted away by Metal Tiger. But perhaps not before a few jittery shareholders may have been panicked out – or more importantly, a few bears went short. The stock has firmed up since BMR (BMR) confirmed it would not be making a higher offer, and one would imagine a squeeze of sorts is on.
This idea is backed up by the post-April price pattern on the daily chart, where the pullback from the early 2016 peaks looks to be a continuation pattern. Here the consolidation can be regarded as positive, especially in the wake of the triple bounce just below 2p.
The implication now is that provided there is no weekly close back below the floor of the 2016 wedge pattern, we could be due a long awaited major reversal. Those who are cautious on the prospects of a new leg to the upside ahead of a 2-3 months timeframe retest of the 6p plus highs would wait on a clearance of the 50 day moving average at 2.5p plus before taking the plunge on the upside.