Premier African Minerals: Wedge breakout targets 0.5p plus

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Premier African Minerals: Wedge breakout targets 0.5p plus

Premier African Minerals (LON:PREM) has been on the private investor watch list for quite some time. However, after relative disappointment in share price terms, it could very well be that things are finally on the move.

At first glance the daily chart of Premier African Minerals does not offer much cause for optimism. While most stocks in this space, both great and small, tripled over the past year, this particular play tended to just keep on sliding. The hope now is that with the latest improvement in newsflow and an initial technical buy trigger, the faith that the bulls have had over the past year may finally be rewarded.

This is said especially in the wake of the bullish falling wedge break this week, a breakout from a very narrow and extended feature. It also coincides with news that the company has raised £1m to complete work on the RHA Tungsten Mine in Zimbabwe. What is particularly pleasing is that following the fund raise we have seen the shares trade higher, while normally they might be expected to dip, hence this can be regarded as a strong green flag.

As for what happens next, there should be enough momentum behind the shares to deliver a retest of the main post-September resistance zone at 0.5p, an area which currently ties in with the level of the 200 day moving average at 0.51p. The timeframe on the upside scenario is regarded as being the next month. Only back below the 50 day moving average, now at 0.28p, would really delay the bull argument.

prem chart

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