Mkango Resources: Above 4p should lead to 7p

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Mkango Resources: Above 4p should lead to 7p

It is perhaps just as difficult to grapple with a company which divides investor opinion, as one which is held in low regard. This concept is currently being fought out at Mkango Resources (LON:MKA) in the wake of its latest news update.

It has certainly not been a smooth ride for Mkango Resources shareholders, either on the fundamental front, or in particular, the share price. Indeed, one can say it would appear that over the past few months the bears have been on the prowl here, something which can be gleaned from the way since October the 4p zone has come in as stiff resistance.

This will hopefully give way in the wake of news that the company has begun working on its Thambani licence in Malawi. It will of course be interesting to see how the work progresses, but in the meantime fans of the group will be looking to a break of the recent 3p-4p trading range. Of particular interest will also be whether Mkango can bring in a joint venture partner on what is described as a low cost exploration project.

From a charting perspective we are on the edge of our seat waiting to see whether the stock will deliver a decent momentum buy trigger such as an end of day close above 4p. If this can be achieved today/tomorrow, then one would imagine that there could be decent progress over the next couple of months towards the top of a broadening triangle at 7p. However, it would be better to be late on chasing a breakout, rather than jumping the gun.

mka chart

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